Analysts Just Published A Bright New Outlook For HomeCo Daily Needs REIT's (ASX:HDN)

Celebrations may be in order for HomeCo Daily Needs REIT (ASX:HDN) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on HomeCo Daily Needs REIT too, with the stock up 13% to AU$1.54 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the current consensus from HomeCo Daily Needs REIT's three analysts is for revenues of AU$146m in 2022 which - if met - would reflect a substantial 143% increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 253% to AU$0.19. Before this latest update, the analysts had been forecasting revenues of AU$98m and earnings per share (EPS) of AU$0.11 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for HomeCo Daily Needs REIT

Despite these upgrades, the analysts have not made any major changes to their price target of AU$1.64, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. Currently, the most bullish analyst values HomeCo Daily Needs REIT at AU$1.74 per share, while the most bearish prices it at AU$1.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting HomeCo Daily Needs REIT is an easy business to forecast or the underlying assumptions are obvious.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at HomeCo Daily Needs REIT.

Analysts are definitely bullish on HomeCo Daily Needs REIT, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including major dilution from new stock issuance in the past year. You can learn more, and discover the 2 other flags we've identified, for 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.