Ascott Residence Trust (SGX:HMN) Annual Results: Here's What Analysts Are Forecasting For This Year

Ascott Residence Trust (SGX:HMN) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were S$394m, with Ascott Residence Trust reporting some 7.5% below analyst expectations. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Ascott Residence Trust

Taking into account the latest results, the consensus forecast from Ascott Residence Trust's eight analysts is for revenues of S$541.2m in 2022, which would reflect a huge 37% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to plunge 60% to S$0.038 in the same period. In the lead-up to this report, the analysts had been modelling revenues of S$538.5m and earnings per share (EPS) of S$0.035 in 2022. So the consensus seems to have become somewhat more optimistic on Ascott Residence Trust's earnings potential following these results.

There's been no major changes to the consensus price target of S$1.16, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Ascott Residence Trust, with the most bullish analyst valuing it at S$1.30 and the most bearish at S$0.90 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ascott Residence Trust shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Ascott Residence Trust is forecast to grow faster in the future than it has in the past, with revenues expected to display 37% annualised growth until the end of 2022. If achieved, this would be a much better result than the 5.7% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.4% per year. Not only are Ascott Residence Trust's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

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 Ascott Residence Trust following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at S$1.16, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Ascott Residence Trust. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Ascott Residence Trust analysts - going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 5 warning signs for Ascott Residence Trust you should be aware of, and 2 of them shouldn't be ignored.

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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.