EastGroup Properties, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Shareholders of EastGroup Properties, Inc. (NYSE:EGP) will be pleased this week, given that the stock price is up 10% to US$134 following its latest quarterly results. EastGroup Properties reported US$90m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.60 beat expectations, being 9.1% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for EastGroup Properties
Taking into account the latest results, the current consensus from EastGroup Properties' eleven analysts is for revenues of US$357.7m in 2020, which would reflect a satisfactory 5.0% increase on its sales over the past 12 months. Statutory earnings per share are forecast to crater 25% to US$2.31 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$357.5m and earnings per share (EPS) of US$2.26 in 2020. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$117, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values EastGroup Properties at US$138 per share, while the most bearish prices it at US$95.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that EastGroup Properties' revenue growth will slow down substantially, with revenues next year expected to grow 5.0%, compared to a historical growth rate of 8.5% over the past five years. Compare this to the 184 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.4% per year. So it's pretty clear that, while EastGroup Properties' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around EastGroup Properties' earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for EastGroup Properties going out to 2024, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 6 warning signs with EastGroup Properties (at least 2 which shouldn't be ignored) , and understanding them should be part of your investment process.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
