A week ago, Weingarten Realty Investors (NYSE:WRI) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 12% higher than the analysts had forecast, at US$112m, while EPS were US$0.20 beating analyst models by 166%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus, from the four analysts covering Weingarten Realty Investors, is for revenues of US$424.8m in 2021, which would reflect a noticeable 3.7% reduction in Weingarten Realty Investors' sales over the past 12 months. Statutory earnings per share are forecast to tumble 75% to US$0.48 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$430.7m and earnings per share (EPS) of US$0.44 in 2021. So the consensus seems to have become somewhat more optimistic on Weingarten Realty Investors' earnings potential following these results.
There's been no major changes to the consensus price target of US$19.95, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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. The most optimistic Weingarten Realty Investors analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$16.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. One more thing stood out to us about these estimates, and it's the idea that Weingarten Realty Investors'decline is expected to accelerate, with revenues forecast to fall 3.7% next year, topping off a historical decline of 2.8% a year over the past five years. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to grow 5.9% next year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Weingarten Realty Investors to suffer worse than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Weingarten Realty Investors following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Weingarten Realty Investors' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$19.95, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Weingarten Realty Investors going out to 2023, and you can see them free on our platform here..
Plus, you should also learn about the 4 warning signs we've spotted with Weingarten Realty Investors (including 2 which are a bit concerning) .
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