The latest analyst coverage could presage a bad day for Chatham Lodging Trust (NYSE:CLDT), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the consensus from Chatham Lodging Trust's three analysts is for revenues of US$164m in 2020, which would reflect a substantial 45% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of US$185m in 2020. It looks like forecasts have become a fair bit less optimistic on Chatham Lodging Trust, given the measurable cut to revenue estimates.

Check out our latest analysis for Chatham Lodging Trust

There was no particular change to the consensus price target of US$8.10, with Chatham Lodging Trust's latest outlook seemingly not enough to result in a change of valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Chatham Lodging Trust at US$10.00 per share, while the most bearish prices it at US$7.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Chatham Lodging Trust shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Chatham Lodging Trust's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 45% revenue decline a notable change from historical growth of 5.0% 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 5.1% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Chatham Lodging Trust is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Chatham Lodging Trust this year. They're also anticipating slower revenue growth than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Chatham Lodging Trust going forwards.

Still got questions? At least one of Chatham Lodging Trust's three analysts has provided estimates out to 2022, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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