Last week, you might have seen that Equity LifeStyle Properties, Inc. (NYSE:ELS) released its third-quarter result to the market. The early response was not positive, with shares down 2.9% to US$62.03 in the past week. Results overall were respectable, with statutory earnings of US$0.28 per share roughly in line with what the analysts had forecast. Revenues of US$285m came in 4.8% ahead of analyst predictions. The 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Equity LifeStyle Properties' four analysts are now forecasting revenues of US$1.10b in 2021. This would be a satisfactory 2.1% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to swell 13% to US$1.36. Before this earnings report, the analysts had been forecasting revenues of US$1.11b and earnings per share (EPS) of US$1.33 in 2021. 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$72.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Equity LifeStyle Properties, with the most bullish analyst valuing it at US$77.00 and the most bearish at US$65.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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 would highlight that Equity LifeStyle Properties' revenue growth is expected to slow, with forecast 2.1% increase next year well below the historical 5.9%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.0% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Equity LifeStyle Properties.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Equity LifeStyle Properties' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than 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.
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 Simply Wall St, we have a full range of analyst estimates for Equity LifeStyle Properties going out to 2023, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 3 warning signs for Equity LifeStyle Properties you should be aware of, and 1 of them shouldn't be ignored.
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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