Kennedy-Wilson Holdings, Inc. (NYSE:KW) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.
After the upgrade, the three analysts covering Kennedy-Wilson Holdings are now predicting revenues of US$597m in 2021. If met, this would reflect a huge 26% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$483m of revenue in 2021. The consensus has definitely become more optimistic, showing a sizeable gain to revenue forecasts.
There was no particular change to the consensus price target of US$22.50, with Kennedy-Wilson Holdings' latest outlook seemingly not enough to result in a change of 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. The most optimistic Kennedy-Wilson Holdings analyst has a price target of US$23.00 per share, while the most pessimistic values it at US$21.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Kennedy-Wilson Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 37% annualised growth until the end of 2021. If achieved, this would be a much better result than the 5.9% 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 13% annually. Not only are Kennedy-Wilson Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Kennedy-Wilson Holdings this year. They're also forecasting more rapid revenue growth than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Kennedy-Wilson Holdings.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 5 potential flags with Kennedy-Wilson Holdings, including its declining profit margins. You can learn more, and discover the 3 other flags we've identified, for free on our platform here.
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