Earnings Update: Chartwell Retirement Residences (TSE:CSH.UN) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts

Investors in Chartwell Retirement Residences (TSE:CSH.UN) had a good week, as its shares rose 4.0% to close at CA$18.39 following the release of its second-quarter results. It was a credible result overall, with revenues of CA$273m and statutory earnings per share of CA$0.086 both in line with analyst estimates, showing that Chartwell Retirement Residences is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the most recent consensus for Chartwell Retirement Residences from five analysts is for revenues of CA$1.13b in 2025. If met, it would imply a meaningful 15% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 33% to CA$0.25. Before this earnings report, the analysts had been forecasting revenues of CA$1.10b and earnings per share (EPS) of CA$0.15 in 2025. So it seems there's been a definite increase in optimism about Chartwell Retirement Residences' future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.

See our latest analysis for Chartwell Retirement Residences

Despite these upgrades,the analysts have not made any major changes to their price target of CA$21.33, 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. The most optimistic Chartwell Retirement Residences analyst has a price target of CA$22.00 per share, while the most pessimistic values it at CA$20.00. This is a very narrow spread of estimates, implying either that Chartwell Retirement Residences is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Chartwell Retirement Residences' growth to accelerate, with the forecast 31% annualised growth to the end of 2025 ranking favourably alongside historical growth of 0.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Chartwell Retirement Residences is expected to grow much faster than its 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 Chartwell Retirement Residences following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at CA$21.33, 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 forecasts for Chartwell Retirement Residences going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Chartwell Retirement Residences (1 is potentially serious!) that we have uncovered.

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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.