APAC Realty Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

APAC Realty Limited (SGX:CLN) just released its annual report and things are looking bullish. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 10% higher than the analysts had forecast, at S$393m, while EPS of S$0.046 beat analyst models by 17%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on APAC Realty after the latest results.

View our latest analysis for APAC Realty

Following last week's earnings report, APAC Realty's five analysts are forecasting 2021 revenues to be S$398.5m, approximately in line with the last 12 months. Per-share earnings are expected to swell 15% to S$0.053. In the lead-up to this report, the analysts had been modelling revenues of S$368.2m and earnings per share (EPS) of S$0.041 in 2021. So it seems there's been a definite increase in optimism about APAC Realty's future following the latest results, with a massive increase in the earnings per share forecasts in particular.

It will come as no surprise to learn that the analysts have increased their price target for APAC Realty 9.1% to S$0.52on the back of these upgrades. 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 APAC Realty analyst has a price target of S$0.68 per share, while the most pessimistic values it at S$0.36. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. We would highlight that APAC Realty's revenue growth is expected to slow, with forecast 1.5% increase next year well below the historical 5.5%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% next year. Factoring in the forecast slowdown in growth, it seems obvious that APAC Realty is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards APAC Realty following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on APAC Realty. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for APAC Realty going out to 2023, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for APAC Realty that you need to be mindful of.

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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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