Investors in Whitbread plc (LON:WTB) had a good week, as its shares rose 5.8% to close at UK£25.86 following the release of its interim results. It was a credible result overall, with revenues of UK£1.6b and statutory earnings per share of UK£1.22 both in line with analyst estimates, showing that Whitbread is executing in line with expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, Whitbread's 17 analysts currently expect revenues in 2027 to be UK£2.91b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 453% to UK£1.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£2.91b and earnings per share (EPS) of UK£1.76 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
View our latest analysis for Whitbread
There's been no major changes to the consensus price target of UK£27.23, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. Currently, the most bullish analyst values Whitbread at UK£37.00 per share, while the most bearish prices it at UK£21.25. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Whitbread's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 2.7% annualised decline to the end of 2027. That is a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Whitbread is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Whitbread's earnings potential next year. 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 UK£27.23, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Whitbread. Long-term earnings power is much more important than next year's profits. We have forecasts for Whitbread going out to 2029, and you can see them free on our platform here.
You still need to take note of risks, for example - Whitbread has 3 warning signs (and 1 which is significant) we think you should know about.
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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.