Yahoo Finance Analysts Are Updating Their Capital & Counties Properties PLC (LON:CAPC) Estimates After Its Yearly Results
Shareholders might have noticed that Capital & Counties Properties PLC (LON:CAPC) filed its yearly result this time last week. The early response was not positive, with shares down 6.7% to UK£1.68 in the past week. Revenues of UK£73m crushed expectations, although expenses also blew out, with the company reporting a statutory loss per share of UK£0.82, 34% bigger than analysts expected. 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.
Check out our latest analysis for Capital & Counties Properties
Taking into account the latest results, the current consensus, from the seven analysts covering Capital & Counties Properties, is for revenues of UK£60.0m in 2021, which would reflect a not inconsiderable 18% reduction in Capital & Counties Properties' sales over the past 12 months. Earnings are expected to improve, with Capital & Counties Properties forecast to report a statutory profit of UK£0.033 per share. Before this earnings announcement, the analysts had been modelling revenues of UK£58.8m and losses of UK£0.12 per share in 2021. The analysts have definitely been lifting their expectations, with the company expected to reach profitability next year - sooner than expected - thanks to the small lift in revenue expectations.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of UK£1.65, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Capital & Counties Properties at UK£2.11 per share, while the most bearish prices it at UK£1.20. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One more thing stood out to us about these estimates, and it's the idea that Capital & Counties Properties' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 18% to the end of 2021. This tops off a historical decline of 8.7% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.0% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Capital & Counties Properties to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts now expect Capital & Counties Properties to become profitable next year, compared to previous expectations that it would report a loss. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. The consensus price target held steady at UK£1.65, 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. At Simply Wall St, we have a full range of analyst estimates for Capital & Counties Properties going out to 2023, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Capital & Counties Properties that you should be aware of.
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. 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.
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