AmRest Holdings SE (WSE:EAT) Just Reported Earnings, And Analysts Cut Their Target Price

Last week, you might have seen that AmRest Holdings SE (WSE:EAT) released its quarterly result to the market. The early response was not positive, with shares down 3.4% to zł14.02 in the past week. Revenues came in 4.2% below expectations, at €643m. Statutory earnings per share were relatively better off, with a per-share profit of €0.039 being roughly in line with analyst estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from AmRest Holdings' five analysts is for revenues of €2.74b in 2025. This reflects a modest 5.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 41% to €0.22. Before this earnings report, the analysts had been forecasting revenues of €2.71b and earnings per share (EPS) of €0.16 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the great increase in earnings per share expectations following these results.

See our latest analysis for AmRest Holdings

The average the analysts price target fell 21% to zł18.16, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. 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 AmRest Holdings, with the most bullish analyst valuing it at zł27.50 and the most bearish at zł11.90 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.

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. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 12% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.6% annually. So although AmRest Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards AmRest Holdings following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for AmRest Holdings going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for AmRest Holdings (1 makes us a bit uncomfortable!) that you need to take into consideration.

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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.