Brandywine Realty Trust (NYSE:BDN) shareholders are probably feeling a little disappointed, since its shares fell 6.1% to US$9.92 in the week after its latest first-quarter results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$145m, statutory earnings beat expectations by a notable 26%, coming in at US$0.04 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Brandywine Realty Trust after the latest results.
Taking into account the latest results, the most recent consensus for Brandywine Realty Trust from four analysts is for revenues of US$589.3m in 2020 which, if met, would be a reasonable 3.2% increase on its sales over the past 12 months. Statutory earnings per share are forecast to nosedive 22% to US$0.17 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$595.0m and earnings per share (EPS) of US$0.13 in 2020. Although the revenue estimates have not really changed, we can see there's been a great increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target fell 6.9% to US$12.72, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Brandywine Realty Trust at US$18.00 per share, while the most bearish prices it at US$8.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. For example, we noticed that Brandywine Realty Trust's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 3.2%, well above its historical decline of 1.2% a year over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 4.3% next year. Although Brandywine Realty Trust's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Brandywine Realty Trust following these results. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Brandywine Realty Trust's future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Brandywine Realty Trust going out to 2024, and you can see them free on our platform here..
Before you take the next step you should know about the 4 warning signs for Brandywine Realty Trust (1 can't be ignored!) that we have uncovered.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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. Thank you for reading.