Great Portland Estates Plc (LON:GPOR) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results were mixed, with revenues of UK£83m beating expectations by 15%. Great Portland Estates continued to be lossmaking, reporting a UK£0.80 statutory loss per share, in line with analyst forecasts. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Great Portland Estates from nine analysts is for revenues of UK£110.1m in 2022 which, if met, would be a huge 33% increase on its sales over the past 12 months. Earnings are expected to improve, with Great Portland Estates forecast to report a statutory profit of UK£0.36 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£90.9m and earnings per share (EPS) of UK£0.094 in 2022. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.
Despite these upgrades,the analysts have not made any major changes to their price target of UK£6.93, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. Currently, the most bullish analyst values Great Portland Estates at UK£8.93 per share, while the most bearish prices it at UK£4.60. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Great Portland Estates' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Great Portland Estates is forecast to grow faster in the future than it has in the past, with revenues expected to display 33% annualised growth until the end of 2022. If achieved, this would be a much better result than the 25% annual decline over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.6% annually. So it looks like Great Portland Estates is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Great Portland Estates' earnings potential next year. 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 UK£6.93, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Great Portland Estates. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Great Portland Estates going out to 2025, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Great Portland Estates that you should be aware of.
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