Analysts Are Updating Their Corporate Office Properties Trust (NYSE:OFC) Estimates After Its Third-Quarter Results
Shareholders might have noticed that Corporate Office Properties Trust (NYSE:OFC) filed its third-quarter result this time last week. The early response was not positive, with shares down 8.1% to US$22.43 in the past week. Revenues of US$155m beat expectations by a respectable 5.1%, although statutory losses per share increased. Corporate Office Properties Trust lost US$0.29, which was 71% more than what the analysts had included in their models. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Corporate Office Properties Trust after the latest results.
Check out our latest analysis for Corporate Office Properties Trust
After the latest results, the four analysts covering Corporate Office Properties Trust are now predicting revenues of US$623.2m in 2021. If met, this would reflect a reasonable 3.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 85% to US$0.96. In the lead-up to this report, the analysts had been modelling revenues of US$623.1m and earnings per share (EPS) of US$0.94 in 2021. So the consensus seems to have become somewhat more optimistic on Corporate Office Properties Trust's earnings potential following these results.
There's been no major changes to the consensus price target of US$29.08, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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. The most optimistic Corporate Office Properties Trust analyst has a price target of US$34.00 per share, while the most pessimistic values it at US$24.00. This shows there is still a bit of 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. It's clear from the latest estimates that Corporate Office Properties Trust's rate of growth is expected to accelerate meaningfully, with the forecast 3.0% revenue growth noticeably faster than its historical growth of 0.7%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 5.9% next year. So it's clear that despite the acceleration in growth, Corporate Office Properties Trust is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Corporate Office Properties Trust's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Corporate Office Properties Trust analysts - going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 3 warning signs we've spotted with Corporate Office Properties Trust (including 1 which is a bit unpleasant) .
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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