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PS Business Parks, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

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Simply Wall St
·3 min read
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Shareholders might have noticed that PS Business Parks, Inc. (NYSE:PSB) filed its quarterly result this time last week. The early response was not positive, with shares down 5.9% to US$111 in the past week. Revenues were US$104m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$1.11, an impressive 39% ahead of estimates. 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.

View our latest analysis for PS Business Parks

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

Following last week's earnings report, PS Business Parks' two analysts are forecasting 2021 revenues to be US$415.6m, approximately in line with the last 12 months. Statutory earnings per share are expected to nosedive 29% to US$3.26 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$415.5m and earnings per share (EPS) of US$2.33 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the considerable lift to earnings per share expectations following these results.

The consensus price target was unchanged at US$130, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.3%, a significant reduction from annual growth of 3.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.0% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - PS Business Parks is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around PS Business Parks' 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. The consensus price target held steady at US$130, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

Plus, you should also learn about the 4 warning signs we've spotted with PS Business Parks (including 1 which is a bit concerning) .

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@simplywallst.com.