Earnings Release: Here's Why Analysts Cut Their AmRest Holdings SE (WSE:EAT) Price Target To zł22.88

Shareholders might have noticed that AmRest Holdings SE (WSE:EAT) filed its first-quarter result this time last week. The early response was not positive, with shares down 6.9% to zł16.42 in the past week. AmRest Holdings reported in line with analyst predictions, delivering revenues of €633m and statutory earnings per share of €0.039, suggesting the business is executing well and in line with its plan. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on AmRest Holdings after the latest results.

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Taking into account the latest results, the most recent consensus for AmRest Holdings from four analysts is for revenues of €2.80b in 2025. If met, it would imply a solid 8.4% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 5,273% to €0.37. In the lead-up to this report, the analysts had been modelling revenues of €2.75b and earnings per share (EPS) of €0.34 in 2025. Although the revenue estimates have not really changed, we can see there's been a nice increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

See our latest analysis for AmRest Holdings

The consensus price target fell 7.4% to zł22.88, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic AmRest Holdings analyst has a price target of zł27.50 per share, while the most pessimistic values it at zł17.30. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 11% growth on an annualised basis. That is in line with its 10% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.9% per year. So it's pretty clear that AmRest Holdings is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around AmRest Holdings' earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still 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.

With that in mind, we wouldn't be too quick to come to a conclusion on AmRest Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple AmRest Holdings analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 4 warning signs for AmRest Holdings (1 doesn't sit too well with us) 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.