Yahoo Finance Stockland Just Recorded A 51% EPS Beat: Here's What Analysts Are Forecasting Next
It's been a good week for Stockland (ASX:SGP) shareholders, because the company has just released its latest half-year results, and the shares gained 5.8% to AU$5.32. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at AU$1.2b, statutory earnings beat expectations by a notable 51%, coming in at AU$0.21 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Check out our latest analysis for Stockland
After the latest results, the consensus from Stockland's eight analysts is for revenues of AU$2.64b in 2020, which would reflect a chunky 11% decline in sales compared to the last year of performance. Statutory earnings per share are expected to jump 67% to AU$0.36. In the lead-up to this report, analysts had been modelling revenues of AU$2.56b and earnings per share (EPS) of AU$0.35 in 2020. So there seems to have been a moderate uplift in analyst sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Although analysts have upgraded their earnings estimates, there was no change to the consensus price target of AU$4.68, suggesting that the forecast performance does not have a long term impact on the company's valuation It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Stockland, with the most bullish analyst valuing it at AU$5.55 and the most bearish at AU$3.90 per share. 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.
Further, we can compare these estimates to past performance, and see how Stockland forecasts compare to the wider market's forecast performance. These estimates imply that sales are expected to slow, with a forecast revenue decline of 11% a significant reduction from annual growth of 7.0% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 0.4% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Stockland to grow slower than the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Stockland following these results. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider market. The consensus price target held steady at AU$4.68, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Stockland going out to 2022, and you can see them free on our platform here.
It might also be worth considering whether Stockland's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
