First Industrial Realty Trust, Inc. Just Beat EPS By 17%: Here's What Analysts Think Will Happen Next

Simply Wall St
October 23, 2020

First Industrial Realty Trust, Inc. (NYSE:FR) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 7.2% to hit US$116m. First Industrial Realty Trust reported statutory earnings per share (EPS) US$0.28, which was a notable 17% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on First Industrial Realty Trust after the latest results.

Check out our latest analysis for First Industrial Realty Trust

NYSE:FR Earnings and Revenue Growth October 23rd 2020

After the latest results, the seven analysts covering First Industrial Realty Trust are now predicting revenues of US$445.6m in 2021. If met, this would reflect a credible 3.3% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to plunge 41% to US$0.97 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$445.6m and earnings per share (EPS) of US$0.82 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.

There's been no major changes to the consensus price target of US$44.30, 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. Currently, the most bullish analyst values First Industrial Realty Trust at US$50.00 per share, while the most bearish prices it at US$39.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting First Industrial Realty Trust is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of First Industrial Realty Trust'shistorical trends, as next year's 3.3% revenue growth is roughly in line with 3.7% annual revenue growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 6.0% next year. So although First Industrial Realty Trust is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around First Industrial Realty Trust's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$44.30, 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 First Industrial Realty Trust going out to 2024, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 4 warning signs for First Industrial Realty Trust (2 are a bit unpleasant!) that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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