Artis Real Estate Investment Trust (TSE:AX.UN) shares fell 4.7% to CA$12.06 in the week since its latest full-year results. The result was fairly weak overall, with revenues of CA$522m being 2.3% less than what analysts had been modelling. Following the result, 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. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Following the recent earnings report, the consensus fromthree analysts covering Artis Real Estate Investment Trust expects revenues of CA$495.0m in 2020, implying a perceptible 5.1% decline in sales compared to the last 12 months. Prior to the latest earnings, analysts were forecasting revenues of CA$489.1m in 2020, and did not provide an EPS estimate. Overall it looks like Artis Real Estate Investment Trust is performing in line with analyst expectations, given analysts have updated their numbers and there's been no real change to next year's forecast following these results.
There's been no real change to the consensus price target of CA$13.30, with Artis Real Estate Investment Trustseemingly executing in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Artis Real Estate Investment Trust at CA$14.00 per share, while the most bearish prices it at CA$12.50. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Artis Real Estate Investment Trust's performance in recent years. One thing that stands out from these estimates is that, even though revenues are forecast to keep falling, the decline is expected to accelerate. Analysts have modelled a 5.1% decline next year, compared to a historical decline of 0.3% per annum for the past five years. Compare this with our data on other companies (with analyst coverage) in a similar industry, which in aggregate are forecast to see their revenue decline 4.4% per year. It seems clear that while revenues are expected to continue declining, analysts also expect the downturn to be more severe than that of the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is the bullish forecast for profits next year. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at CA$13.30, with the latest estimates not enough to have an impact on analysts' estimated valuations.
We have estimates for Artis Real Estate Investment Trust from its three analysts , and you can see them free on our platform here.
You can also view our analysis of Artis Real Estate Investment Trust's balance sheet, and whether we think Artis Real Estate Investment Trust is carrying too much debt, for free on our platform here.
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