It's been a good week for APAC Realty Limited (SGX:CLN) shareholders, because the company has just released its latest yearly results, and the shares gained 3.2% to S$0.48. It was a credible result overall, with revenues of S$369m and statutory earnings per share of S$0.039 both in line with analyst estimates, showing that APAC Realty is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the current consensus from APAC Realty's four analysts is for revenues of S$410.4m in 2020, which would reflect a decent 11% increase on its sales over the past 12 months. Statutory earnings per share are expected to increase 10.0% to S$0.043. Yet prior to the latest earnings, analysts had been forecasting revenues of S$382.1m and earnings per share (EPS) of S$0.047 in 2020. So it's pretty clear consensus is mixed on APAC Realty after the latest results; while analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.
There's been no major changes to an analyst price target of S$0.57, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. 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. Currently, the most bullish analyst values APAC Realty at S$0.61 per share, while the most bearish prices it at S$0.52. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
In addition, we can look to APAC Realty's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. Next year brings more of the same, according to analysts, with revenue forecast to grow 11%, in line with its 11% annual growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 11% next year. It's clear that while APAC Realty's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the market itself.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. The consensus price target held steady at S$0.57, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for APAC Realty going out to 2022, and you can see them free on our platform here.
It might also be worth considering whether APAC Realty's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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