Rainbows and Unicorns: NewRiver REIT plc (LON:NRR) Analysts Just Became A Lot More Optimistic

Celebrations may be in order for NewRiver REIT plc (LON:NRR) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following this upgrade, NewRiver REIT's three analysts are forecasting 2022 revenues to be UK£93m, approximately in line with the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting UK£0.011 in per-share earnings. Yet prior to the latest estimates, the analysts had been forecasting revenues of UK£68m and losses of UK£0.068 per share in 2022. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.

See our latest analysis for NewRiver REIT

With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.6% to UK£1.01 per share. 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. The most optimistic NewRiver REIT analyst has a price target of UK£1.30 per share, while the most pessimistic values it at UK£0.70. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.4% by the end of 2022. This indicates a significant reduction from annual growth of 9.5% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.3% per year. It's pretty clear that NewRiver REIT's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the consensus now expects NewRiver REIT to become profitable this year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at NewRiver REIT.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for NewRiver REIT going out to 2024, and you can see them free on our platform here..

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. 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.
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