Lemon Tree Hotels Limited (NSE:LEMONTREE) Just Reported And Analysts Have Been Lifting Their Price Targets

The third-quarter results for Lemon Tree Hotels Limited (NSE:LEMONTREE) were released last week, making it a good time to revisit its performance. Results overall were respectable, with statutory earnings of ₹0.79 per share roughly in line with what the analysts had forecast. Revenues of ₹3.6b came in 2.7% ahead of analyst predictions. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Lemon Tree Hotels

Taking into account the latest results, the consensus forecast from Lemon Tree Hotels' 16 analysts is for revenues of ₹15.1b in 2026. This reflects a major 22% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 61% to ₹3.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹15.1b and earnings per share (EPS) of ₹3.74 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Despite cutting their earnings forecasts,the analysts have lifted their price target 5.5% to ₹166, suggesting that these impacts are not expected to weigh on the stock's value in the long term. 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. Currently, the most bullish analyst values Lemon Tree Hotels at ₹200 per share, while the most bearish prices it at ₹135. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Lemon Tree Hotels' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Lemon Tree Hotels' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. Compare this to the 88 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 21% per year. So it's pretty clear that, while Lemon Tree Hotels' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Lemon Tree Hotels going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Lemon Tree Hotels you should be aware of.

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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.