Industry Analysts Just Made A Captivating Upgrade To Their Chartwell Retirement Residences (TSE:CSH.UN) Revenue Forecasts

Chartwell Retirement Residences (TSE:CSH.UN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Chartwell Retirement Residences will make substantially more sales than they'd previously expected. The market seems to be pricing in some improvement in the business too, with the stock up 6.1% over the past week, closing at CA$9.40. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After this upgrade, Chartwell Retirement Residences' dual analysts are now forecasting revenues of CA$985m in 2023. This would be a sizeable 40% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing CA$867m of revenue in 2023. The consensus has definitely become more optimistic, showing a nice gain to revenue forecasts.

View our latest analysis for Chartwell Retirement Residences

There was no particular change to the consensus price target of CA$11.30, with Chartwell Retirement Residences' latest outlook seemingly not enough to result in a change of valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Chartwell Retirement Residences, with the most bullish analyst valuing it at CA$12.00 and the most bearish at CA$11.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Chartwell Retirement Residences is an easy business to forecast or the underlying assumptions are obvious.

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. For example, we noticed that Chartwell Retirement Residences' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 40% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 1.0% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.7% annually. Not only are Chartwell Retirement Residences' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Chartwell Retirement Residences.

Analysts are definitely bullish on Chartwell Retirement Residences, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including the risk of cutting its dividend. For more information, you can click through to our platform to learn more about this and the 1 other flag we've identified .

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.