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Results: RPT Realty Exceeded Expectations And The Consensus Has Updated Its Estimates

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A week ago, RPT Realty (NYSE:RPT) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 2.4% to hit US$56m. RPT Realty also reported a statutory profit of US$0.05, which was an impressive 258% above what the analysts had forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for RPT Realty

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

Taking into account the latest results, RPT Realty's four analysts currently expect revenues in 2022 to be US$225.5m, approximately in line with the last 12 months. The company is forecast to report a statutory loss of US$0.02 in 2022, a sharp decline from a profit over the last year. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$220.5m and losses of US$0.014 per share in 2022. So it's pretty clear the analysts have mixed opinions on RPT Realty even after this update; although they upped their revenue numbers, it came at the cost of a considerable increase to per-share losses.

There was no major change to the consensus price target of US$14.89, with growing revenues seemingly enough to offset the concern of growing losses. 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. The most optimistic RPT Realty analyst has a price target of US$17.00 per share, while the most pessimistic values it at US$13.50. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 also worth noting that the years of declining sales look to have come to an end, with the forecast for flat revenues to the end of 2022. Historically, RPT Realty's sales have shrunk approximately 6.5% annually over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.6% annually. So it's pretty clear that, although revenues are improving, RPT Realty is still expected to grow slower than the industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. We have estimates - from multiple RPT Realty analysts - going out to 2023, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 5 warning signs for RPT Realty you should be aware of, and 2 of them are a bit unpleasant.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.