Yahoo Finance DiamondRock Hospitality Company (NYSE:DRH) Just Released Its Yearly Results And Analysts Are Updating Their Estimates
As you might know, DiamondRock Hospitality Company (NYSE:DRH) recently reported its yearly numbers. The results overall were pretty much dead in line with analyst forecasts; revenues were US$567m and statutory losses were US$0.96 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on DiamondRock Hospitality after the latest results.
Check out our latest analysis for DiamondRock Hospitality
Taking into account the latest results, the most recent consensus for DiamondRock Hospitality from eleven analysts is for revenues of US$803.8m in 2022 which, if met, would be a huge 42% increase on its sales over the past 12 months. DiamondRock Hospitality is also expected to turn profitable, with statutory earnings of US$0.19 per share. In the lead-up to this report, the analysts had been modelling revenues of US$801.1m and earnings per share (EPS) of US$0.20 in 2022. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at US$10.29, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on DiamondRock Hospitality, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$8.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the DiamondRock Hospitality's past performance and to peers in the same industry. For example, we noticed that DiamondRock Hospitality's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 42% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 16% a year 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 7.7% annually. Not only are DiamondRock Hospitality's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for DiamondRock Hospitality. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$10.29, 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 DiamondRock Hospitality. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple DiamondRock Hospitality analysts - going out to 2023, and you can see them free on our platform here.
You still need to take note of risks, for example - DiamondRock Hospitality has 2 warning signs (and 1 which shouldn't be ignored) 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.
