Lendlease Global Commercial REIT Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

As you might know, Lendlease Global Commercial REIT (SGX:JYEU) recently reported its full-year numbers. Revenues fell 3.6% short of expectations, at S$79m. Earnings correspondingly dipped, with Lendlease Global Commercial REIT reporting a statutory loss of S$0.0016 per share, whereas the analysts had previously modelled a profit in this period. 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.

View our latest analysis for Lendlease Global Commercial REIT

After the latest results, the five analysts covering Lendlease Global Commercial REIT are now predicting revenues of S$83.5m in 2022. If met, this would reflect a satisfactory 6.1% improvement in sales compared to the last 12 months. Lendlease Global Commercial REIT is also expected to turn profitable, with statutory earnings of S$0.041 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$86.0m and earnings per share (EPS) of S$0.041 in 2022. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The consensus has reconfirmed its price target of S$0.92, showing that the analysts don't expect weaker sales expectations next year to have a material impact on Lendlease Global Commercial REIT's market value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Lendlease Global Commercial REIT at S$1.01 per share, while the most bearish prices it at S$0.82. 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 Lendlease Global Commercial REIT's past performance and to peers in the same industry. We would highlight that Lendlease Global Commercial REIT's revenue growth is expected to slow, with the forecast 6.1% annualised growth rate until the end of 2022 being well below the historical 101% growth over the last year. Compare this to the 39 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.9% per year. Factoring in the forecast slowdown in growth, it looks like Lendlease Global Commercial REIT is forecast to grow at about the same rate as the wider 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. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at S$0.92, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Lendlease Global Commercial REIT analysts - going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Lendlease Global Commercial REIT (of which 1 is significant!) you should know about.

If you’re looking to trade Lendlease Global Commercial REIT, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.