There’s been a major selloff in Urstadt Biddle Properties Inc. (NYSE:UBA) shares in the week since it released its first-quarter report, with the stock down 32% to US$14.07. Statutory earnings per share fell badly short of expectations, coming in at US$0.13, some 51% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$34m. Earnings are an important time for investors, as they can track a company’s performance, look at what top analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week’s earnings report, Urstadt Biddle Properties’s sole analyst are forecasting 2020 revenues to be US$137.8m, approximately in line with the last 12 months. Statutory earnings per share are expected to surge 93% to US$1.08. Before this earnings report, analysts had been forecasting revenues of US$139.1m and earnings per share (EPS) of US$1.12 in 2020. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but analysts did make a small dip in their earnings per share forecasts.
The average analyst price target fell 6.8% to US$22.67, with reduced earnings forecasts clearly tied to a lower valuation estimate.
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 would highlight that sales are expected to reverse, with the forecast 0.7% revenue decline a notable change from historical growth of 5.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 5.1% annually for the foreseeable future. It’s pretty clear that Urstadt Biddle Properties’s revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Urstadt Biddle Properties. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations – although our data does suggest that Urstadt Biddle Properties’s revenues are expected to perform worse than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
With that in mind, we wouldn’t be too quick to come to a conclusion on Urstadt Biddle Properties. Long-term earnings power is much more important than next year’s profits. We have analyst estimates for Urstadt Biddle Properties going out as far as 2021, and you can see them free on our platform here.
It might also be worth considering whether Urstadt Biddle Properties’s debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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