Analysts Just Made A Massive Upgrade To Their Chalet Hotels Limited (NSE:CHALET) Forecasts

Chalet Hotels Limited (NSE:CHALET) 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.

Following the upgrade, the most recent consensus for Chalet Hotels from its five analysts is for revenues of ₹10b in 2023 which, if met, would be a substantial 49% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting ₹3.80 in per-share earnings. Before this latest update, the analysts had been forecasting revenues of ₹9.4b and earnings per share (EPS) of ₹2.65 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Chalet Hotels

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.5% to ₹362 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Chalet Hotels, with the most bullish analyst valuing it at ₹400 and the most bearish at ₹330 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Chalet Hotels' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 70% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 32% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 19% annually. So it looks like Chalet Hotels is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Chalet Hotels could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Chalet Hotels going out to 2025, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.