Healthcare Realty Trust Incorporated (NYSE:HR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After the upgrade, the three analysts covering Healthcare Realty Trust are now predicting revenues of US$914m in 2022. If met, this would reflect a major 63% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 162% to US$0.45. Previously, the analysts had been modelling revenues of US$802m and earnings per share (EPS) of US$0.41 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$30.00, suggesting that the forecast performance does not have a long term impact on the company'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. There are some variant perceptions on Healthcare Realty Trust, with the most bullish analyst valuing it at US$33.00 and the most bearish at US$27.00 per share. This is a very narrow spread of estimates, implying either that Healthcare Realty Trust is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Healthcare Realty Trust's rate of growth is expected to accelerate meaningfully, with the forecast 167% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 5.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Healthcare Realty Trust is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Healthcare Realty Trust.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential concerns with Healthcare Realty Trust, including major dilution from new stock issuance in the past year. You can learn more, and discover the 2 other concerns we've identified, for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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