Sydney Airport Limited Yearly Results: Here's What Analysts Are Forecasting For Next Year

Sydney Airport Limited (ASX:SYD) shares fell 2.2% to AU$8.39 in the week since its latest full-year results. Sydney Airport reported AU$1.6b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of AU$0.18 beat expectations, being 3.7% higher than what analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.

Check out our latest analysis for Sydney Airport

Following last week's earnings report, Sydney Airport's 13 analysts are forecasting 2020 revenues to be AU$1.65b, approximately in line with the last 12 months. Statutory per share are forecast to be AU$0.18, approximately in line with the last 12 months. In the lead-up to this report, analysts had been modelling revenues of AU$1.69b and earnings per share (EPS) of AU$0.18 in 2020. Analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the AU$8.22 price target, showing that analysts don't think the changes have a meaningful impact on the stock's intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Sydney Airport at AU$9.11 per share, while the most bearish prices it at AU$6.90. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

In addition, we can look to Sydney Airport's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's pretty clear that analysts expect Sydney Airport's revenue growth will slow down substantially, with revenues next year expected to grow 0.9%, compared to a historical growth rate of 7.5% over the past five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 3.6% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Sydney Airport.

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 Sydney Airport. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. 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.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Sydney Airport going out to 2024, and you can see them free on our platform here..

You can also see whether Sydney Airport 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 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.

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