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Urban Edge Properties (NYSE:UE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the upgrade, the most recent consensus for Urban Edge Properties from its two analysts is for revenues of US$391m in 2021 which, if met, would be a solid 18% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to plummet 33% to US$0.37 in the same period. Previously, the analysts had been modelling revenues of US$350m and earnings per share (EPS) of US$0.097 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Despite these upgrades, the analysts have not made any major changes to their price target of US$18.63, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Urban Edge Properties at US$22.00 per share, while the most bearish prices it at US$13.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Urban Edge Properties' rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 1.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Urban Edge Properties is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Urban Edge Properties.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 7 potential flags with Urban Edge Properties, including recent substantial insider selling. You can learn more, and discover the 5 other flags we've identified, 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.
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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