The Consensus EPS Estimates For RAK Properties PJSC (ADX:RAKPROP) Just Fell A Lot

Market forces rained on the parade of RAK Properties PJSC (ADX:RAKPROP) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the downgrade, the latest consensus from RAK Properties PJSC's lone analyst is for revenues of د.إ390m in 2022, which would reflect a satisfactory 2.4% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to nosedive 36% to د.إ0.01 in the same period. Before this latest update, the analyst had been forecasting revenues of د.إ510m and earnings per share (EPS) of د.إ0.09 in 2022. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for RAK Properties PJSC

The consensus price target fell 6.3% to د.إ0.75, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. It's pretty clear that there is an expectation that RAK Properties PJSC's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 2.4% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that RAK Properties PJSC is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

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 2024, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.