Industry Analysts Just Made A Huge Upgrade To Their Restaurant Brands Asia Limited (NSE:RBA) Revenue Forecasts

Restaurant Brands Asia Limited (NSE:RBA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the latest consensus from Restaurant Brands Asia's dual analysts is for revenues of ₹24b in 2023, which would reflect a substantial 60% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing ₹14b of revenue in 2023. It looks like there's been a clear increase in optimism around Restaurant Brands Asia, given the great increase in revenue forecasts.

Check out our latest analysis for Restaurant Brands Asia

Notably, the analysts have cut their price target 14% to ₹148, suggesting concerns around Restaurant Brands Asia'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. There are some variant perceptions on Restaurant Brands Asia, with the most bullish analyst valuing it at ₹215 and the most bearish at ₹113 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. The analysts are definitely expecting Restaurant Brands Asia's growth to accelerate, with the forecast 60% annualised growth to the end of 2023 ranking favourably alongside historical growth of 21% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 23% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Restaurant Brands Asia is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. The analysts also expect revenues to grow faster than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Restaurant Brands Asia.

That's a pretty serious upgrade, but shareholders might be even more pleased to know that forecasts expect Restaurant Brands Asia to be able to reach break-even within the next few years. You can learn more about these forecasts, for free on our 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.