Stock Analysis

GPT Group Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

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ASX:GPT
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GPT Group (ASX:GPT) just released its latest yearly results and things are looking bullish. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 11% higher than the analysts had forecast, at AU$760m, while EPS of AU$0.28 beat analyst models by 15%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for GPT Group

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ASX:GPT Earnings and Revenue Growth February 16th 2021

Following the recent earnings report, the consensus from nine analysts covering GPT Group is for revenues of AU$738.5m in 2021, implying a perceptible 2.8% decline in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 6,612% to AU$0.29. Before this earnings report, the analysts had been forecasting revenues of AU$736.8m and earnings per share (EPS) of AU$0.27 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of AU$4.75, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic GPT Group analyst has a price target of AU$5.37 per share, while the most pessimistic values it at AU$4.37. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue shrink 2.2% per year. So it's pretty clear that GPT Group sales are expected to decline at a faster rate than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards GPT Group following these results. The consensus also reconfirmed their revenue estimates, suggesting that sales are performing in line with expectations. Plus, our data suggests that GPT Group is expected to perform worse than the wider industry. The consensus price target held steady at AU$4.75, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple GPT Group analysts - going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for GPT Group you should be aware of.

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