Investors in Rexford Industrial Realty, Inc. (NYSE:REXR) had a good week, as its shares rose 4.2% to close at US$51.73 following the release of its annual results. Revenues were US$267m, approximately in line with what analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.47, an impressive 44% ahead of estimates. 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. So we gathered the latest post-earnings forecasts to see what analysts’ statutory forecasts suggest is in store for next year.
Taking into account the latest results, the current consensus from Rexford Industrial Realty’s one analyst is for revenues of US$307.8m in 2020, which would reflect a solid 15% increase on its sales over the past 12 months. Statutory earnings per share are forecast to tumble 69% to US$0.15 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$307.8m and earnings per share (EPS) of US$0.16 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share forecasts for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$51.14, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Rexford Industrial Realty’s performance in recent years. It’s pretty clear that analysts expect Rexford Industrial Realty’s revenue growth will slow down substantially, with revenues next year expected to grow 15%, compared to a historical growth rate of 26% 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) 5.0% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkRexford Industrial Realty will grow faster than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Rexford Industrial Realty. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$51.14, 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. At least one analyst has provided forecasts out to 2020, which can be seen for free on our platform here.
It might also be worth considering whether Rexford Industrial Realty’s debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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