Alaris Equity Partners Income Trust Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

As you might know, Alaris Equity Partners Income Trust (TSE:AD.UN) just kicked off its latest yearly results with some very strong numbers. The company beat expectations with revenues of CA$198m arriving 5.9% ahead of forecasts. Statutory earnings per share (EPS) were CA$2.79, 8.1% ahead of estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Alaris Equity Partners Income Trust

Following the recent earnings report, the consensus from four analysts covering Alaris Equity Partners Income Trust is for revenues of CA$157.0m in 2023, implying a sizeable 21% decline in sales compared to the last 12 months. Statutory earnings per share are expected to plunge 36% to CA$1.84 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$167.4m and earnings per share (EPS) of CA$2.08 in 2023. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a substantial drop in earnings per share numbers.

The analysts made no major changes to their price target of CA$22.00, suggesting the downgrades are not expected to have a long-term impact on Alaris Equity Partners Income Trust'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. There are some variant perceptions on Alaris Equity Partners Income Trust, with the most bullish analyst valuing it at CA$24.50 and the most bearish at CA$19.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Alaris Equity Partners Income Trust is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 21% by the end of 2023. This indicates a significant reduction from annual growth of 17% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 1.1% per year. So it's pretty clear that Alaris Equity Partners Income Trust's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Alaris Equity Partners Income Trust. Unfortunately they also downgraded their revenue estimates, and our analysts estimates suggest that Alaris Equity Partners Income Trust is still expected to perform worse than the wider industry. The consensus price target held steady at CA$22.00, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Alaris Equity Partners Income Trust analysts - going out to 2024, and you can see them free on our platform here.

Even so, be aware that Alaris Equity Partners Income Trust is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.