The Restaurant Brands Asia Limited (NSE:RBA) Third-Quarter Results Are Out And Analysts Have Published New Forecasts

Shareholders might have noticed that Restaurant Brands Asia Limited (NSE:RBA) filed its third-quarter result this time last week. The early response was not positive, with shares down 2.1% to ₹118 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 5.2%to hit ₹6.0b. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Restaurant Brands Asia

After the latest results, the six analysts covering Restaurant Brands Asia are now predicting revenues of ₹30.7b in 2025. If met, this would reflect a major 30% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 35% to ₹2.70. Yet prior to the latest earnings, the analysts had been forecasting revenues of ₹31.3b and losses of ₹2.46 per share in 2025. So it's pretty clear consensus is more negative on Restaurant Brands Asia after the new consensus numbers; while the analysts trimmed their revenue estimates, they also administered a moderate increase in per-share loss expectations.

There was no major change to the consensus price target of ₹133, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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. The most optimistic Restaurant Brands Asia analyst has a price target of ₹151 per share, while the most pessimistic values it at ₹110. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Restaurant Brands Asia shareholders.

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. It's pretty clear that there is an expectation that Restaurant Brands Asia's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 24% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% annually. Even after the forecast slowdown in growth, it seems obvious that Restaurant Brands Asia is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Restaurant Brands Asia. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Restaurant Brands Asia going out to 2026, 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 Restaurant Brands Asia you should be aware of.

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.