The quarterly results for Four Corners Property Trust, Inc. (NYSE:FCPT) were released last week, making it a good time to revisit its performance. Revenues of US$42m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.27, missing estimates by 2.5%. 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 Four Corners Property Trust after the latest results.
Taking into account the latest results, the current consensus from Four Corners Property Trust's five analysts is for revenues of US$167.4m in 2020, which would reflect a credible 2.7% increase on its sales over the past 12 months. Statutory earnings per share are predicted to increase 4.0% to US$1.12. In the lead-up to this report, the analysts had been modelling revenues of US$167.5m and earnings per share (EPS) of US$1.15 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The average price target fell 7.3% to US$25.33, with reduced earnings forecasts clearly tied to a lower valuation estimate. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Four Corners Property Trust, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$22.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Four Corners Property Trust's past performance and to peers in the same industry. We would highlight that Four Corners Property Trust's revenue growth is expected to slow, with forecast 2.7% increase next year well below the historical 27%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Four Corners Property Trust.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Four Corners Property Trust. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 forecasts for Four Corners Property Trust going out to 2023, and you can see them free on our platform here.
Plus, you should also learn about the 4 warning signs we've spotted with Four Corners Property Trust (including 1 which is a bit unpleasant) .
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