The full-year results for UDR, Inc. (NYSE:UDR) were released last week, making it a good time to revisit its performance. Revenues were US$1.3b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.20, an impressive 46% ahead of estimates. 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 UDR after the latest results.
Taking into account the latest results, the current consensus, from the eleven analysts covering UDR, is for revenues of US$1.23b in 2021, which would reflect a perceptible 2.7% reduction in UDR's sales over the past 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.015 per share in 2021. In the lead-up to this report, the analysts had been modelling revenues of US$1.23b and earnings per share (EPS) of US$0.022 in 2021. So despite reconfirming their revenue estimates, the analysts are now forecasting a loss instead of a profit, which looks like a definite drop in sentiment following the latest results.
The consensus price target held steady at US$43.44, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values UDR at US$54.00 per share, while the most bearish prices it at US$35.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 2.7% revenue decline a notable change from historical growth of 6.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - UDR is expected to lag the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for UDR dropped from profits to a loss 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.
With that in mind, we wouldn't be too quick to come to a conclusion on UDR. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for UDR going out to 2025, and you can see them free on our platform here..
You still need to take note of risks, for example - UDR has 4 warning signs (and 1 which is significant) we think you should know about.
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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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