Need To Know: The Consensus Just Cut Its Great Portland Estates Plc (LON:GPE) Estimates For 2023

Today is shaping up negative for Great Portland Estates Plc (LON:GPE) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the nine analysts covering Great Portland Estates provided consensus estimates of UK£82m revenue in 2023, which would reflect an uneasy 12% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£94m in 2023. It looks like forecasts have become a fair bit less optimistic on Great Portland Estates, given the measurable cut to revenue estimates.

See our latest analysis for Great Portland Estates

We'd point out that there was no major changes to their price target of UK£5.62, suggesting the latest estimates were not enough to shift their view on the value of the business. 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. There are some variant perceptions on Great Portland Estates, with the most bullish analyst valuing it at UK£7.06 and the most bearish at UK£4.60 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Great Portland Estates shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing that stands out from these estimates is that revenues are expected to keep falling until the end of 2023, roughly in line with the historical decline of 27% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.7% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Great Portland Estates to suffer worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Great Portland Estates this year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Great Portland Estates after today.

Not only have the analysts been downgrading the stock, but it looks like Great Portland Estates might find it hard to maintain its dividends, if these forecasts prove accurate. For more information, you can click here to learn more about our dividend analysis and the 1 potential warning sign we've identified.

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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.