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As you might know, Corporación América Airports S.A. (NYSE:CAAP) just kicked off its latest annual results with some very strong numbers. Revenues of US$905m beat estimates by a substantial 54% margin. Unfortunately, Corporación América Airports also reported a statutory loss of US$1.58 per share, which at least was smaller than the analyst expected. Following the result, the analyst has 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. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.
Following the recent earnings report, the consensus from lone analyst covering Corporación América Airports is for revenues of US$861.5m in 2021, implying a discernible 4.8% decline in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 74% to US$0.41. Before this earnings announcement, the analyst had been modelling revenues of US$861.5m and losses of US$0.59 per share in 2021. Although the revenue estimate has not really changed Corporación América Airports'future looks a little different to the past, with a very favorable reduction to the loss per share forecasts in particular.
The average price target rose 93% to US$5.30, with the analyst signalling that the forecast reduction in losses would be a positive for the stock's valuation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Over the past five years, revenues have declined around 1.7% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 4.8% decline in revenue until the end of 2021. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 17% per year. So while a broad number of companies are forecast to grow, unfortunately Corporación América Airports is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The most obvious conclusion is that the analyst made no changes to their forecasts for a loss next year. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Corporación América Airports' revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Corporación América Airports you should be aware of.
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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