It's been a mediocre week for Urstadt Biddle Properties Inc. (NYSE:UBA) shareholders, with the stock dropping 13% to US$13.47 in the week since its latest second-quarter results. Revenues were US$31m, 11% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of US$0.07 being in line with what the analysts forecast. Following the result, the analysts have 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following last week's earnings report, Urstadt Biddle Properties' dual analysts are forecasting 2020 revenues to be US$134.4m, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 33% to US$0.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$139.0m and earnings per share (EPS) of US$0.39 in 2020. Although the analysts have lowered their sales forecasts, they've also made a massive increase in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.
The consensus price target fell 5.5% to US$17.25, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 1.0% revenue decline a notable change from historical growth of 4.7% 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 4.9% annually for the foreseeable future. It's pretty clear that Urstadt Biddle Properties' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Urstadt Biddle Properties following these results. 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. Yet - earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Urstadt Biddle Properties. 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.
Even so, be aware that Urstadt Biddle Properties is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
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