Dine Brands Global, Inc. (NYSE:DIN) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues came in 3.0% below expectations, at US$217m. Earnings per share were relatively better off, with a per-share profit of US$1.36 being roughly in line with analyst estimates. Following the result, 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. We’ve gathered the most recent forecasts to see whether analysts have changed their earnings models, following these results.
Following last week’s earnings report, Dine Brands Global’s five analysts are forecasting 2020 revenues to be US$912m, approximately in line with the last 12 months. Earnings per share are expected to swell 19% to US$6.98. Before this earnings report, analysts had been forecasting revenues of US$902m and earnings per share (EPS) of US$7.00 in 2020. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$101, suggesting that the company has met expectations in its recent result. The consensus price target just an average of individual analyst targets, so – considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Dine Brands Global, with the most bullish analyst valuing it at US$120 and the most bearish at US$90.00 per share. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that analysts have a clear view on its prospects.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how analyst forecasts compare, both to the Dine Brands Global’s past performance and to peers in the same market. We would highlight that Dine Brands Global’s revenue growth is expected to slow, with forecast 1.7% increase next year well below the historical 5.0%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 6.9% next year. Factoring in the forecast slowdown in growth, it seems obvious that analysts are also expecting Dine Brands Global to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations – although our data does suggest that Dine Brands Global’s revenues are expected to perform worse than the wider market. The consensus price target held steady at US$101, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates – from multiple Dine Brands Global analysts – going out to 2022, and you can see them free on our platform here.
You can also see whether Dine Brands Global is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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