Mindspace Business Parks REIT Just Missed EPS By 25%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Mindspace Business Parks REIT (NSE:MINDSPACE) filed its full-year result this time last week. The early response was not positive, with shares down 2.9% to ₹340 in the past week. It looks like a pretty bad result, all things considered. Although revenues of ₹18b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 25% to hit ₹7.15 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Mindspace Business Parks REIT

Taking into account the latest results, the current consensus from Mindspace Business Parks REIT's nine analysts is for revenues of ₹18.9b in 2023, which would reflect a reasonable 7.5% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 56% to ₹11.13. In the lead-up to this report, the analysts had been modelling revenues of ₹20.6b and earnings per share (EPS) of ₹12.75 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the ₹368 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. The most optimistic Mindspace Business Parks REIT analyst has a price target of ₹401 per share, while the most pessimistic values it at ₹322. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mindspace Business Parks REIT's past performance and to peers in the same industry. It's clear from the latest estimates that Mindspace Business Parks REIT's rate of growth is expected to accelerate meaningfully, with the forecast 7.5% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 3.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Mindspace Business Parks REIT is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Mindspace Business Parks REIT. They also downgraded their revenue estimates, although industry data suggests that Mindspace Business Parks REIT's revenues are expected to grow faster than the wider industry. The consensus price target held steady at ₹368, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that 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 Mindspace Business Parks REIT going out to 2025, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Mindspace Business Parks REIT that you need to take into consideration.

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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.