Washington Real Estate Investment Trust (NYSE:WRE): What Does The Future Look Like?

The latest earnings announcement Washington Real Estate Investment Trust (NYSE:WRE) released in December 2018 showed that the company benefited from a robust tailwind, leading to a double-digit earnings growth of 30%. Today I want to provide a brief commentary on how market analysts perceive Washington Real Estate Investment Trust’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

See our latest analysis for Washington Real Estate Investment Trust

Analysts’ outlook for the coming year seems pessimistic, with earnings reducing by a double-digit -15%. However, the next few years seem to illustrate a completely different picture, with expected earnings growth rates reaching double digit 16% compared to today’s level and continues to increase.

NYSE:WRE Past and Future Earnings, March 7th 2019
NYSE:WRE Past and Future Earnings, March 7th 2019

While it’s helpful to be aware of the growth year by year relative to today’s figure, it may be more insightful estimating the rate at which the company is moving every year, on average. The advantage of this approach is that we can get a bigger picture of the direction of Washington Real Estate Investment Trust’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 23%. This means, we can anticipate Washington Real Estate Investment Trust will grow its earnings by 23% every year for the next few years.

Next Steps:

For Washington Real Estate Investment Trust, I’ve compiled three pertinent aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is WRE worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether WRE is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WRE? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.