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Here's What Analysts Are Forecasting For STORE Capital Corporation (NYSE:STOR) After Its Annual Results

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Simply Wall St
·4 min read
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It's been a good week for STORE Capital Corporation (NYSE:STOR) shareholders, because the company has just released its latest yearly results, and the shares gained 2.8% to US$33.44. STORE Capital reported in line with analyst predictions, delivering revenues of US$693m and statutory earnings per share of US$0.84, suggesting the business is executing well and in line with its plan. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for STORE Capital

earnings-and-revenue-growth
earnings-and-revenue-growth

Following the latest results, STORE Capital's seven analysts are now forecasting revenues of US$759.3m in 2021. This would be a decent 9.5% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 6.1% to US$0.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$758.2m and earnings per share (EPS) of US$0.90 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$33.50. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values STORE Capital at US$37.00 per share, while the most bearish prices it at US$29.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting STORE Capital is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that STORE Capital's revenue growth is expected to slow, with forecast 9.5% increase next year well below the historical 17%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% next year. So it's pretty clear that, while STORE Capital's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$33.50, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for STORE Capital going out to 2025, and you can see them free on our platform here..

You still need to take note of risks, for example - STORE Capital has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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 (at) simplywallst.com.