Last week, you might have seen that BTG Hotels (Group) Co., Ltd. (SHSE:600258) released its yearly result to the market. The early response was not positive, with shares down 4.7% to CN¥14.26 in the past week. BTG Hotels (Group) reported in line with analyst predictions, delivering revenues of CN¥7.8b and statutory earnings per share of CN¥0.71, 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 BTG Hotels (Group) after the latest results.
Following the latest results, BTG Hotels (Group)'s 20 analysts are now forecasting revenues of CN¥8.58b in 2024. This would be a decent 10% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 24% to CN¥0.88. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥8.57b and earnings per share (EPS) of CN¥0.88 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of CN¥19.84, showing that the business is executing well and in line with expectations. 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 BTG Hotels (Group) analyst has a price target of CN¥26.10 per share, while the most pessimistic values it at CN¥11.00. 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.
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. For example, we noticed that BTG Hotels (Group)'s rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 10% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 6.7% a year 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 revenue grow 19% per year. Although BTG Hotels (Group)'s revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CN¥19.84, with the latest estimates not enough to have an impact on their price targets.
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 BTG Hotels (Group) going out to 2025, and you can see them free on our platform here.
You can also see our analysis of BTG Hotels (Group)'s Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.