Federal Realty Investment Trust Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Federal Realty Investment Trust (NYSE:FRT) just released its latest quarterly results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.2% to hit US$264m. Federal Realty Investment Trust also reported a statutory profit of US$0.75, which was an impressive 26% above what the analysts had forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Federal Realty Investment Trust after the latest results.

Check out our latest analysis for Federal Realty Investment Trust

Following last week's earnings report, Federal Realty Investment Trust's nine analysts are forecasting 2022 revenues to be US$1.04b, approximately in line with the last 12 months. Statutory earnings per share are expected to tumble 25% to US$2.52 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.02b and earnings per share (EPS) of US$2.39 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$119, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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. There are some variant perceptions on Federal Realty Investment Trust, with the most bullish analyst valuing it at US$140 and the most bearish at US$96.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Federal Realty Investment Trust shareholders.

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 can infer from the latest estimates that forecasts expect a continuation of Federal Realty Investment Trust'shistorical trends, as the 2.2% annualised revenue growth to the end of 2022 is roughly in line with the 1.9% annual revenue growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 7.0% annually. So it's pretty clear that Federal Realty Investment Trust is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Federal Realty Investment 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 forecasts for Federal Realty Investment Trust 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 3 warning signs for Federal Realty Investment Trust (of which 1 is a bit concerning!) you should know about.

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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.