These Analysts Think Hannon Armstrong Sustainable Infrastructure Capital, Inc.'s (NYSE:HASI) Sales Are Under Threat

The latest analyst coverage could presage a bad day for Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the latest consensus from Hannon Armstrong Sustainable Infrastructure Capital's seven analysts is for revenues of US$133m in 2023, which would reflect a huge 21% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 579% to US$1.45. Prior to this update, the analysts had been forecasting revenues of US$151m and earnings per share (EPS) of US$1.52 in 2023. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

View our latest analysis for Hannon Armstrong Sustainable Infrastructure Capital

Analysts made no major changes to their price target of US$43.50, suggesting the downgrades are not expected to have a long-term impact on Hannon Armstrong Sustainable Infrastructure Capital's valuation. 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. Currently, the most bullish analyst values Hannon Armstrong Sustainable Infrastructure Capital at US$50.00 per share, while the most bearish prices it at US$29.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The analysts are definitely expecting Hannon Armstrong Sustainable Infrastructure Capital's growth to accelerate, with the forecast 29% annualised growth to the end of 2023 ranking favourably alongside historical growth of 16% per annum 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 46% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Hannon Armstrong Sustainable Infrastructure Capital is expected to grow slower than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Hannon Armstrong Sustainable Infrastructure Capital. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Hannon Armstrong Sustainable Infrastructure Capital's revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Hannon Armstrong Sustainable Infrastructure Capital after today.

That said, the analysts might have good reason to be negative on Hannon Armstrong Sustainable Infrastructure Capital, given the risk of cutting its dividend. For more information, you can click here to discover this and the 2 other concerns we've identified.

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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.