Need To Know: Analysts Just Made A Substantial Cut To Their Emaar Properties PJSC (DFM:EMAAR) Estimates

One thing we could say about the analysts on Emaar Properties PJSC (DFM:EMAAR) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. Surprisingly the share price has been buoyant, rising 10% to د.إ6.00 in the past 7 days. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

Following the latest downgrade, the current consensus, from the eight analysts covering Emaar Properties PJSC, is for revenues of د.إ27b in 2022, which would reflect a noticeable 5.7% reduction in Emaar Properties PJSC's sales over the past 12 months. Per-share earnings are expected to bounce 34% to د.إ0.62. Before this latest update, the analysts had been forecasting revenues of د.إ31b and earnings per share (EPS) of د.إ0.71 in 2022. Indeed, we can see that the analysts are a lot more bearish about Emaar Properties PJSC's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Emaar Properties PJSC

Analysts made no major changes to their price target of د.إ6.42, suggesting the downgrades are not expected to have a long-term impact on Emaar Properties PJSC's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Emaar Properties PJSC analyst has a price target of د.إ7.15 per share, while the most pessimistic values it at د.إ5.20. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Emaar Properties PJSC shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Emaar Properties PJSC's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 5.7% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 6.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 0.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Emaar Properties PJSC is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Emaar Properties PJSC's revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Emaar Properties PJSC after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Emaar Properties PJSC analysts - going out to 2024, and you can see them 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.