Earnings Beat: Broadstone Net Lease, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for Broadstone Net Lease, Inc. (NYSE:BNL) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.4% to US$14.94. Revenues were US$110m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.26, an impressive 46% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Broadstone Net Lease after the latest results.

View our latest analysis for Broadstone Net Lease

Following the latest results, Broadstone Net Lease's five analysts are now forecasting revenues of US$461.1m in 2024. This would be an okay 2.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to crater 29% to US$0.70 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$461.4m and earnings per share (EPS) of US$0.66 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at US$18.83, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values Broadstone Net Lease at US$22.00 per share, while the most bearish prices it at US$17.00. This is a very narrow spread of estimates, implying either that Broadstone Net Lease is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 Broadstone Net Lease's revenue growth is expected to slow, with the forecast 2.0% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Broadstone Net Lease.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Broadstone Net Lease's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$18.83, 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 Broadstone Net Lease. 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 Broadstone Net Lease going out to 2025, and you can see them free on our platform here..

Plus, you should also learn about the 5 warning signs we've spotted with Broadstone Net Lease (including 2 which don't sit too well with us) .

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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.