It's shaping up to be a tough period for One Liberty Properties, Inc. (NYSE:OLP), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. One Liberty Properties missed analyst forecasts, with revenues of US$21m and statutory earnings per share (EPS) of US$0.39, falling short by 2.7% and 2.5% respectively. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from One Liberty Properties' twin analysts is for revenues of US$87.4m in 2020, which would reflect a modest 3.9% increase on its sales over the past 12 months. Statutory earnings per share are forecast to sink 11% to US$0.96 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$88.4m and earnings per share (EPS) of US$0.71 in 2020. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.
The consensus price target was unchanged at US$16.50, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that One Liberty Properties' revenue growth is expected to slow, with forecast 3.9% increase next year well below the historical 7.0%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.9% next year. Factoring in the forecast slowdown in growth, it seems obvious that One Liberty Properties is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around One Liberty Properties' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that One Liberty Properties' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$16.50, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
And what about risks? Every company has them, and we've spotted 5 warning signs for One Liberty Properties (of which 2 can't be ignored!) you should know about.
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