Tanger Factory Outlet Centers, Inc. (NYSE:SKT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Tanger Factory Outlet Centers will make substantially more sales than they'd previously expected.
Following the upgrade, the consensus from five analysts covering Tanger Factory Outlet Centers is for revenues of US$408m in 2022, implying a discernible 6.1% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$369m of revenue in 2022. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.
We'd point out that there was no major changes to their price target of US$19.29, suggesting the latest estimates were not enough to shift their view on the value of the business. 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. There are some variant perceptions on Tanger Factory Outlet Centers, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$16.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
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 more thing stood out to us about these estimates, and it's the idea that Tanger Factory Outlet Centers' decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 4.9% to the end of 2022. This tops off a historical decline of 3.8% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.7% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Tanger Factory Outlet Centers to suffer worse than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Tanger Factory Outlet Centers next year. They also expect company revenue to perform worse 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 Tanger Factory Outlet Centers.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential concerns with Tanger Factory Outlet Centers, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other concerns we've identified, for free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.