Stock Analysis

Results: EPR Properties Beat Earnings Expectations And Analysts Now Have New Forecasts

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NYSE:EPR
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EPR Properties (NYSE:EPR) investors will be delighted, with the company turning in some strong numbers with its latest results. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 11% higher than the analysts had forecast, at US$125m, while EPS were US$0.17 beating analyst models by 141%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for EPR Properties

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NYSE:EPR Earnings and Revenue Growth August 2nd 2021

Taking into account the latest results, the most recent consensus for EPR Properties from three analysts is for revenues of US$511.2m in 2021 which, if met, would be a major 32% increase on its sales over the past 12 months. EPR Properties is also expected to turn profitable, with statutory earnings of US$0.66 per share. Before this earnings report, the analysts had been forecasting revenues of US$458.9m and earnings per share (EPS) of US$0.51 in 2021. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$53.38, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on EPR Properties, with the most bullish analyst valuing it at US$62.00 and the most bearish at US$43.00 per share. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the EPR Properties' past performance and to peers in the same industry. One thing stands out from these estimates, which is that EPR Properties is forecast to grow faster in the future than it has in the past, with revenues expected to display 73% annualised growth until the end of 2021. If achieved, this would be a much better result than the 0.7% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.5% annually. So it looks like EPR Properties is expected to grow faster than its competitors, at least for a while.

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 EPR Properties following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$53.38, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for EPR Properties going out to 2022, 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 EPR Properties (of which 1 makes us a bit uncomfortable!) you should know about.

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What are the risks and opportunities for EPR Properties?

EPR Properties is a leading experiential net lease real estate investment trust (REIT), specializing in select enduring experiential properties in the real estate industry.

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Rewards

  • Trading at 56.5% below our estimate of its fair value

  • Earnings are forecast to grow 5.77% per year

  • Earnings grew by 1452.9% over the past year

Risks

  • Interest payments are not well covered by earnings

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