Keppel DC REIT (SGX:AJBU) Just Released Its Annual Results And Analysts Are Updating Their Estimates

Keppel DC REIT (SGX:AJBU) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of S$266m arriving 2.9% ahead of forecasts. Statutory earnings per share (EPS) were S$0.10, 3.7% ahead of estimates. 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. 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 Keppel DC REIT

Following the latest results, Keppel DC REIT's nine analysts are now forecasting revenues of S$293.7m in 2021. This would be a solid 11% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to accumulate 8.4% to S$0.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$289.2m and earnings per share (EPS) of S$0.11 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.

There were no changes to revenue or earnings estimates or the price target of S$3.06, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on Keppel DC REIT, with the most bullish analyst valuing it at S$3.32 and the most bearish at S$2.80 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. We would highlight that Keppel DC REIT's revenue growth is expected to slow, with forecast 11% increase next year well below the historical 21%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.1% next year. So it's pretty clear that, while Keppel DC REIT's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

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. We have forecasts for Keppel DC REIT 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 2 warning signs for Keppel DC REIT that you should be aware of.

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