Celebrations may be in order for Ryman Hospitality Properties, Inc. (NYSE:RHP) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
Following the upgrade, the current consensus from Ryman Hospitality Properties' six analysts is for revenues of US$880m in 2021 which - if met - would reflect a substantial 204% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 62% to US$3.33. Yet before this consensus update, the analysts had been forecasting revenues of US$783m and losses of US$4.99 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
Despite these upgrades, the analysts have not made any major changes to their price target of US$83.43, implying that their latest estimates don't have a long term impact on what they think the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Ryman Hospitality Properties at US$100.00 per share, while the most bearish prices it at US$52.00. This shows there is still some 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Ryman Hospitality Properties is forecast to grow faster in the future than it has in the past, with revenues expected to display 8x annualised growth until the end of 2021. If achieved, this would be a much better result than the 4.0% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.7% annually. So it looks like Ryman Hospitality Properties is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Ryman Hospitality Properties' prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Ryman Hospitality Properties.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ryman Hospitality Properties analysts - going out to 2023, and you can see them free on our platform here.
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