One of the biggest stories of last week was how CorEnergy Infrastructure Trust, Inc. (NYSE:CORR) shares plunged 23% in the week since its latest quarterly results, closing yesterday at US$8.74. Statutory results overall were mixed, with revenues coming in 144% lower than the analysts predicted. What's really surprising is that losses of US$12.04 per share were pretty much in line with forecasts, despite the revenue miss. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus, from the twin analysts covering CorEnergy Infrastructure Trust, is for revenues of US$31.2m in 2020, which would reflect a disturbing 63% reduction in CorEnergy Infrastructure Trust's sales over the past 12 months. Losses are forecast to balloon 89% to US$24.30 per share. Before this earnings announcement, the analysts had been modelling revenues of US$43.0m and losses of US$0.50 per share in 2020. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
The average price target fell 40% to US$9.00, implicitly signalling that lower earnings per share are a leading indicator for CorEnergy Infrastructure Trust's valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CorEnergy Infrastructure Trust's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 63%, a significant reduction from annual growth of 7.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CorEnergy Infrastructure Trust is expected to lag the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at CorEnergy Infrastructure Trust. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of CorEnergy Infrastructure Trust's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on CorEnergy Infrastructure Trust. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
You still need to take note of risks, for example - CorEnergy Infrastructure Trust has 4 warning signs (and 1 which is a bit concerning) we think you should know about.
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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