Results: Mid-America Apartment Communities, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts
Mid-America Apartment Communities, Inc. (NYSE:MAA) defied analyst predictions to release its yearly results, which were ahead of market expectations. The company beat both earnings and revenue forecasts, with revenue of US$1.8b, some 3.0% above estimates, and statutory earnings per share (EPS) coming in at US$4.61, 20% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Mid-America Apartment Communities
After the latest results, the ten analysts covering Mid-America Apartment Communities are now predicting revenues of US$1.95b in 2022. If met, this would reflect a satisfactory 6.5% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to fall 16% to US$3.76 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.94b and earnings per share (EPS) of US$3.32 in 2022. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.
The consensus price target was unchanged at US$231, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Mid-America Apartment Communities, with the most bullish analyst valuing it at US$275 and the most bearish at US$209 per share. This is a very narrow spread of estimates, implying either that Mid-America Apartment Communities is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mid-America Apartment Communities' past performance and to peers in the same industry. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 6.5% growth on an annualised basis. That is in line with its 6.2% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 8.0% annually. So although Mid-America Apartment Communities is expected to maintain its revenue growth rate, it's forecast to grow slower than 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 Mid-America Apartment Communities' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Mid-America Apartment Communities' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$231, 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 estimates - from multiple Mid-America Apartment Communities analysts - going out to 2024, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Mid-America Apartment Communities (at least 1 which doesn't sit too well with us) , and understanding these should be part of your investment process.
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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.
