Xenia Hotels & Resorts, Inc. Just Missed Earnings And Its EPS Looked Sad - But Analysts Have Updated Their Models
Last week, you might have seen that Xenia Hotels & Resorts, Inc. (NYSE:XHR) released its full-year result to the market. The early response was not positive, with shares down 6.9% to US$17.71 in the past week. It was not a great result overall. While revenues of US$1.1b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 15% to hit US$0.49 per share. 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 analysts' statutory forecasts suggest is in store for next year.
See our latest analysis for Xenia Hotels & Resorts
Taking into account the latest results, Xenia Hotels & Resorts's seven analysts currently expect revenues in 2020 to be US$1.16b, approximately in line with the last 12 months. Statutory earnings per share are expected to climb 19% to US$0.59. In the lead-up to this report, analysts had been modelling revenues of US$1.16b and earnings per share (EPS) of US$0.65 in 2020. So there's definitely been a decline in analyst sentiment after the latest results, noting the substantial drop in new EPS forecasts.
The consensus price target held steady at US$21.39, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Xenia Hotels & Resorts analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$16.00. This shows there is still quite a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Xenia Hotels & Resorts's past performance and to peers in the same market. It's pretty clear that analysts expect Xenia Hotels & Resorts's revenue growth will slow down substantially, with revenues next year expected to grow 1.1%, compared to a historical growth rate of 3.8% over the past five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 4.9% next 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 Xenia Hotels & Resorts.
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 Xenia Hotels & Resorts. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Xenia Hotels & Resorts's revenues are expected to perform worse than the wider market. The consensus price target held steady at US$21.39, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on Xenia Hotels & Resorts. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Xenia Hotels & Resorts going out to 2021, and you can see them free on our platform here..
It might also be worth considering whether Xenia Hotels & Resorts's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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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