Last week, you might have seen that Canadian Apartment Properties Real Estate Investment Trust (TSE:CAR.UN) released its yearly result to the market. The early response was not positive, with shares down 5.0% to CA$56.13 in the past week. It looks like a credible result overall - although revenues of CA$778m were what analysts expected, Canadian Apartment Properties Real Estate Investment Trust surprised by delivering a (statutory) profit of CA$7.51 per share, an impressive 41% above what analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Canadian Apartment Properties Real Estate Investment Trust's four analysts is for revenues of CA$906.1m in 2020, which would reflect a meaningful 16% increase on its sales over the past 12 months. Statutory earnings per share are expected to tumble 43% to CA$5.34 in the same period. In the lead-up to this report, analysts had been modelling revenues of CA$902.5m and earnings per share (EPS) of CA$3.43 in 2020. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the great increase in earnings per share expectations following these results.
The consensus price target was unchanged at CA$59.68, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Canadian Apartment Properties Real Estate Investment Trust at CA$66.00 per share, while the most bearish prices it at CA$43.00. This shows there is still quite 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.
In addition, we can look to Canadian Apartment Properties Real Estate Investment Trust's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. Analysts are definitely expecting Canadian Apartment Properties Real Estate Investment Trust's growth to accelerate, with the forecast 16% growth ranking favourably alongside historical growth of 8.4% per annum 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 4.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Canadian Apartment Properties Real Estate Investment Trust is expected to grow much faster than its market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Canadian Apartment Properties Real Estate Investment Trust's earnings potential next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Canadian Apartment Properties Real Estate Investment Trust's revenues are expected to grow faster than the wider market. The consensus price target held steady at CA$59.68, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Canadian Apartment Properties Real Estate Investment Trust going out to 2023, and you can see them free on our platform here.
You can also view our analysis of Canadian Apartment Properties Real Estate Investment Trust's balance sheet, and whether we think Canadian Apartment Properties Real Estate Investment Trust is carrying too much debt, for free on our platform here.
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