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What Should Investors Know About Physicians Realty Trust's (NYSE:DOC) Future?

Simply Wall St

As Physicians Realty Trust (NYSE:DOC) released its latest earnings announcement on 31 March 2019, analyst forecasts appear to be bearish, with profits predicted to drop by 3.4% next year relative to the past 5-year average growth rate of 55%. Currently with a trailing-twelve-month profit of US$55m, the consensus growth rate suggests that earnings will drop to US$53m by 2020. Below is a brief commentary on the longer term outlook the market has for Physicians Realty Trust. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

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See our latest analysis for Physicians Realty Trust

How will Physicians Realty Trust perform in the near future?

The view from 9 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of DOC's earnings growth over these next few years.

NYSE:DOC Past and Future Earnings, May 15th 2019

From the current net income level of US$55m and the final forecast of US$61m by 2022, the annual rate of growth for DOC’s earnings is 8.1%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $0.27 in the final year of forecast compared to the current $0.30 EPS today. However, the near term margins may change heading into 2022, from the current levels of 13% to 13%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Physicians Realty Trust, there are three pertinent aspects you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Physicians Realty Trust worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Physicians Realty Trust is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Physicians Realty Trust? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.