As you might know, AvalonBay Communities, Inc. (NYSE:AVB) recently reported its yearly numbers. Results were roughly in line with estimates, with revenues of US$2.3b and statutory earnings per share of US$5.63. 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.
Taking into account the latest results, the latest consensus from AvalonBay Communities’s twelve analysts is for revenues of US$2.43b in 2020, which would reflect a credible 4.4% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to sink 11% to US$5.00 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$2.43b and earnings per share (EPS) of US$4.99 in 2020. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$228. The consensus price target just an average of individual analyst targets, so – considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values AvalonBay Communities at US$248 per share, while the most bearish prices it at US$202. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It’s pretty clear that analysts expect AvalonBay Communities’s revenue growth will slow down substantially, with revenues next year expected to grow 4.4%, compared to a historical growth rate of 5.6% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.1% next year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting AvalonBay Communities to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. 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.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for AvalonBay Communities going out to 2024, and you can see them free on our platform here..
You can also view our analysis of AvalonBay Communities’s balance sheet, and whether we think AvalonBay Communities is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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