As you might know, American Tower Corporation (REIT) (NYSE:AMT) recently reported its full-year numbers. American Tower Corporation (REIT) reported US$7.6b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$4.24 beat expectations, being 6.2% higher than what analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
After the latest results, the 13 analysts covering American Tower Corporation (REIT) are now predicting revenues of US$8.19b in 2020. If met, this would reflect a decent 8.1% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to increase 3.7% to US$4.43. Before this earnings report, analysts had been forecasting revenues of US$8.08b and earnings per share (EPS) of US$4.53 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share forecasts for next year.
Although analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 8.3% to US$253, suggesting the revised estimates are not indicative of a weaker long-term future for the business. 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 American Tower Corporation (REIT) at US$292 per share, while the most bearish prices it at US$165. 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.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. We would highlight that American Tower Corporation (REIT)'s revenue growth is expected to slow, with forecast 8.1% increase next year well below the historical 13%p.a. growth over the last five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.9% next year. So it's pretty clear that, while American Tower Corporation (REIT)'s revenue growth is expected to slow, it's still expected to grow faster than the market itself.
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 American Tower Corporation (REIT). Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that American Tower Corporation (REIT)'s revenues are expected to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on American Tower Corporation (REIT). Long-term earnings power is much more important than next year's profits. We have estimates - from multiple American Tower Corporation (REIT) analysts - going out to 2024, and you can see them free on our platform here.
You can also see whether American Tower Corporation (REIT) is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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