It's been a sad week for H World Group Limited (NASDAQ:HTHT), who've watched their investment drop 11% to US$32.03 in the week since the company reported its third-quarter result. Revenues of CN¥6.4b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥3.99, missing estimates by 5.7%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for H World Group

Taking into account the latest results, the consensus forecast from H World Group's 21 analysts is for revenues of CN¥25.0b in 2025. This reflects a credible 6.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 16% to CN¥13.84. Before this earnings report, the analysts had been forecasting revenues of CN¥25.7b and earnings per share (EPS) of CN¥14.48 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The analysts made no major changes to their price target of US$44.76, suggesting the downgrades are not expected to have a long-term impact on H World Group'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. There are some variant perceptions on H World Group, with the most bullish analyst valuing it at US$50.82 and the most bearish at US$35.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting H World Group is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that H World Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.4% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.9% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than H World Group.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for H World Group. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for H World Group going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - H World Group has 1 warning sign we think you should be aware of.

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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.