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EastGroup Properties, Inc. (NYSE:EGP) shareholders are probably feeling a little disappointed, since its shares fell 2.3% to US$102 in the week after its latest quarterly results. EastGroup Properties reported US$89m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.60 beat expectations, being 6.5% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for EastGroup Properties from eight analysts is for revenues of US$357.7m in 2020 which, if met, would be an okay 5.0% increase on its sales over the past 12 months. Statutory earnings per share are forecast to tumble 30% to US$2.25 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$354.2m and earnings per share (EPS) of US$2.25 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$116, showing that the business is executing well and in line with expectations. 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 EastGroup Properties at US$140 per share, while the most bearish prices it at US$98.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that EastGroup Properties' revenue growth is expected to slow, with forecast 5.0% increase next year well below the historical 8.4%p.a. growth over the last five years. Compare this to the 189 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.4% per year. Factoring in the forecast slowdown in growth, it looks like EastGroup Properties is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$116, 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. We have forecasts for EastGroup Properties going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 5 warning signs we've spotted with EastGroup Properties (including 2 which are a bit unpleasant) .
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