Champion Real Estate Investment Trust Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a good week for Champion Real Estate Investment Trust (HKG:2778) shareholders, because the company has just released its latest annual results, and the shares gained 3.2% to HK$4.54. Revenues came in at HK$2.9b, in line with estimates, while Champion Real Estate Investment Trust reported a statutory loss of HK$2.12 per share, well short of prior analyst forecasts for a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Champion Real Estate Investment Trust

Following the recent earnings report, the consensus from ten analysts covering Champion Real Estate Investment Trust is for revenues of HK$2.86b in 2021, implying a measurable 2.1% decline in sales compared to the last 12 months. Earnings are expected to improve, with Champion Real Estate Investment Trust forecast to report a statutory profit of HK$0.22 per share. Before this earnings report, the analysts had been forecasting revenues of HK$2.91b and earnings per share (EPS) of HK$0.22 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$4.50. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Champion Real Estate Investment Trust at HK$5.60 per share, while the most bearish prices it at HK$3.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 2.1%, a significant reduction from annual growth of 5.5% 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 4.2% next year. It's pretty clear that Champion Real Estate Investment Trust's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Champion Real Estate Investment Trust's revenues are expected to perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Champion Real Estate Investment Trust. Long-term earnings power is much more important than next year's profits. We have forecasts for Champion Real Estate Investment Trust going out to 2023, and you can see them free on our platform here.

Even so, be aware that Champion Real Estate Investment Trust is showing 1 warning sign in our investment analysis , you should know about...

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