The analysts covering Dalata Hotel Group plc (ISE:DHG) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the current consensus from Dalata Hotel Group's four analysts is for revenues of €245m in 2021 which - if met - would reflect a major 79% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing €274m of revenue in 2021. The consensus view seems to have become more pessimistic on Dalata Hotel Group, noting the measurable cut to revenue estimates in this update.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Dalata Hotel Group's growth to accelerate, with the forecast 79% annualised growth to the end of 2021 ranking favourably alongside historical growth of 3.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Dalata Hotel Group to grow faster than the wider industry.
The Bottom Line
The clear low-light was that analysts slashing their revenue forecasts for Dalata Hotel Group this year. Analysts also expect revenues to grow faster than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Dalata Hotel Group going forwards.
Of course, there's always more to the story. We have estimates for Dalata Hotel Group from its four analysts out until 2025, and you can see them free on our platform here.
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