Analyst Forecasts For Barbeque Nation Hospitality Ltd. (NSE:BARBEQUE) Are Surging Higher

Barbeque Nation Hospitality Ltd. (NSE:BARBEQUE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Barbeque Nation Hospitality has also found favour with investors, with the stock up a worthy 20% to ₹1,026 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the most recent consensus for Barbeque Nation Hospitality from its two analysts is for revenues of ₹8.2b in 2022 which, if met, would be a major 37% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 60% to ₹9.30. Yet prior to the latest estimates, the analysts had been forecasting revenues of ₹6.6b and losses of ₹15.65 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

See our latest analysis for Barbeque Nation Hospitality

Despite these upgrades, the analysts have not made any major changes to their price target of ₹1,191, implying that their latest estimates don't have a long term impact on what they think the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Barbeque Nation Hospitality analyst has a price target of ₹1,279 per share, while the most pessimistic values it at ₹1,099. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Barbeque Nation Hospitality is forecast to grow faster in the future than it has in the past, with revenues expected to display 52% annualised growth until the end of 2022. If achieved, this would be a much better result than the 7.1% annual decline over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 26% annually. So it looks like Barbeque Nation Hospitality is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Barbeque Nation Hospitality is moving incrementally towards profitability. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Barbeque Nation Hospitality could be a good candidate for more research.

It's great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. You can learn more about these forecasts, for free on our platform here.

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