Lifestyle Communities Limited (ASX:LIC) Analysts Are Reducing Their Forecasts For This Year

Market forces rained on the parade of Lifestyle Communities Limited (ASX:LIC) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the latest downgrade, Lifestyle Communities' eight analysts currently expect revenues in 2024 to be AU$237m, approximately in line with the last 12 months. Statutory earnings per share are supposed to drop 11% to AU$0.57 in the same period. Prior to this update, the analysts had been forecasting revenues of AU$268m and earnings per share (EPS) of AU$0.65 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.

See our latest analysis for Lifestyle Communities

It'll come as no surprise then, to learn that the analysts have cut their price target 7.5% to AU$16.29.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 1.8% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 15% 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 8.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Lifestyle Communities is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Lifestyle Communities. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Lifestyle Communities' revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Lifestyle Communities.

That said, the analysts might have good reason to be negative on Lifestyle Communities, given concerns around earnings quality. Learn more, and discover the 1 other concern we've identified, 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.