Shareholders might have noticed that Brandywine Realty Trust (NYSE:BDN) filed its third-quarter result this time last week. The early response was not positive, with shares down 3.2% to US$9.88 in the past week. Revenues came in 6.4% below expectations, at US$126m. Statutory earnings per share were relatively better off, with a per-share profit of US$1.60 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus, from the four analysts covering Brandywine Realty Trust, is for revenues of US$526.7m in 2021, which would reflect a noticeable 2.5% reduction in Brandywine Realty Trust's sales over the past 12 months. Statutory earnings per share are forecast to plummet 95% to US$0.096 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$531.5m and earnings per share (EPS) of US$0.14 in 2021. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
The consensus price target held steady at US$11.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Brandywine Realty Trust at US$13.00 per share, while the most bearish prices it at US$9.50. 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.
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. One more thing stood out to us about these estimates, and it's the idea that Brandywine Realty Trust'sdecline is expected to accelerate, with revenues forecast to fall 2.5% next year, topping off a historical decline of 0.3% 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 while a broad number of companies are forecast to decline, unfortunately Brandywine Realty Trust is expected to see its sales affected worse than other companies in the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Brandywine Realty Trust. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$11.50, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Brandywine Realty Trust going out to 2024, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Brandywine Realty Trust (2 are a bit concerning) you should be aware of.
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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