SF Real Estate Investment Trust Just Missed EPS By 13%: Here's What Analysts Think Will Happen Next

As you might know, SF Real Estate Investment Trust (HKG:2191) recently reported its yearly numbers. Revenues hit HK$366m, beating expectations by a remarkable 21%. Statutory earnings per share (EPS) came up short, with EPS of HK$0.22 missing forecasts by 13%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for SF Real Estate Investment Trust

Taking into account the latest results, the consensus forecast from SF Real Estate Investment Trust's three analysts is for revenues of HK$393.0m in 2022, which would reflect a satisfactory 7.3% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to plummet 27% to HK$0.24 in the same period. Before this earnings report, the analysts had been forecasting revenues of HK$401.8m and earnings per share (EPS) of HK$0.26 in 2022. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of HK$5.34, suggesting the downgrades are not expected to have a long-term impact on SF Real Estate Investment Trust's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on SF Real Estate Investment Trust, with the most bullish analyst valuing it at HK$5.80 and the most bearish at HK$4.71 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. We would highlight that SF Real Estate Investment Trust's revenue growth is expected to slow, with the forecast 7.3% annualised growth rate until the end of 2022 being well below the historical 12% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.0% annually. Even after the forecast slowdown in growth, it seems obvious that SF Real Estate Investment Trust is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for SF Real Estate Investment Trust going out to 2023, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 4 warning signs for SF Real Estate Investment Trust (2 are potentially serious) you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.