Shareholders in Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Hannon Armstrong Sustainable Infrastructure Capital will make substantially more sales than they'd previously expected.
Following the upgrade, the latest consensus from Hannon Armstrong Sustainable Infrastructure Capital's seven analysts is for revenues of US$102m in 2021, which would reflect a huge 20% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to sink 18% to US$0.93 in the same period. Previously, the analysts had been modelling revenues of US$85m and earnings per share (EPS) of US$0.90 in 2021. The forecasts seem more optimistic now, with a substantial gain in revenue and a small increase to earnings per share estimates.
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$64.10, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Hannon Armstrong Sustainable Infrastructure Capital analyst has a price target of US$80.00 per share, while the most pessimistic values it at US$48.00. This shows there is still some 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Next year brings more of the same, according to the analysts, with revenue forecast to grow 20%, in line with its 23% annual growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 33% next year. So it's pretty clear that Hannon Armstrong Sustainable Infrastructure Capital is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Hannon Armstrong Sustainable Infrastructure Capital.
Analysts are clearly in love with Hannon Armstrong Sustainable Infrastructure Capital at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 3 other warning signs we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
This article by Simply Wall St is general in nature. 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.
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