Mitchells & Butlers plc Just Recorded A 7.7% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a good week for Mitchells & Butlers plc (LON:MAB) shareholders, because the company has just released its latest half-year results, and the shares gained 3.5% to UK£2.84. Mitchells & Butlers reported UK£1.5b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of UK£0.17 beat expectations, being 7.7% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from Mitchells & Butlers' ten analysts is for revenues of UK£2.72b in 2025. This reflects a satisfactory 2.1% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be UK£0.29, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of UK£2.71b and earnings per share (EPS) of UK£0.28 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

View our latest analysis for Mitchells & Butlers

There's been no major changes to the consensus price target of UK£3.28, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Mitchells & Butlers at UK£3.80 per share, while the most bearish prices it at UK£2.40. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Mitchells & Butlers' revenue growth is expected to slow, with the forecast 4.2% annualised growth rate until the end of 2025 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that Mitchells & Butlers is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Mitchells & Butlers' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Mitchells & Butlers' revenue is expected to perform worse than the wider industry. The consensus price target held steady at UK£3.28, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Mitchells & Butlers. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Mitchells & Butlers analysts - going out to 2027, and you can see them free on our platform here.

It might also be worth considering whether Mitchells & Butlers' debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.