Industry Analysts Just Made A Meaningful Upgrade To Their Australian Unity Office Fund (ASX:AOF) Revenue Forecasts

Australian Unity Office Fund (ASX:AOF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following the latest upgrade, the current consensus, from the three analysts covering Australian Unity Office Fund, is for revenues of AU$28m in 2023, which would reflect a stressful 43% reduction in Australian Unity Office Fund's sales over the past 12 months. Losses are predicted to fall substantially, shrinking 56% to AU$0.13. However, before this estimates update, the consensus had been expecting revenues of AU$22m and AU$0.13 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.

Check out our latest analysis for Australian Unity Office Fund

The consensus price target fell 25% to AU$1.60 asthe analysts signal that ongoing losses are likely to weigh on the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Australian Unity Office Fund, with the most bullish analyst valuing it at AU$1.91 and the most bearish at AU$1.32 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that sales are expected to reverse, with a forecast 43% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 3.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 5.5% annually for the foreseeable future. The forecasts do look bearish for Australian Unity Office Fund, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Australian Unity Office Fund's prospects. Notably, analysts also upgraded their revenue estimates, with sales performing well although Australian Unity Office Fund's revenue growth is expected to trail that of the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Australian Unity Office Fund.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Australian Unity Office Fund analysts - going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.