Countryside Properties PLC (LON:CSP) missed earnings with its latest annual results, disappointing overly-optimistic analysts. Results look to have been somewhat negative - revenue fell 9.8% short of analyst estimates at UK£1.2b, and earnings of UK£0.37 per share missed forecasts by 4.9%. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.
Following the latest results, Countryside Properties's five analysts are now forecasting revenues of UK£1.51b in 2020. This would be a major 22% improvement in sales compared to the last 12 months. Earnings per share are expected to swell 15% to UK£0.43. In the lead-up to this report, analysts had been modelling revenues of UK£1.52b and earnings per share (EPS) of UK£0.43 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at UK£4.04. 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. There are some variant perceptions on Countryside Properties, with the most bullish analyst valuing it at UK£4.54 and the most bearish at UK£3.71 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
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. We can infer from the latest estimates that analysts are expecting a continuation of Countryside Properties's historical trends, as next year's forecast 22% revenue growth is roughly in line with 20% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 1.7% per year. So it's pretty clear that Countryside Properties is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at UK£4.04, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on Countryside Properties. Long-term earnings power is much more important than next year's profits. We have forecasts for Countryside Properties going out to 2023, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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