The latest analyst coverage could presage a bad day for Great Portland Estates Plc (LON:GPOR), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, the eleven analysts covering Great Portland Estates provided consensus estimates of UK£91m revenue in 2021, which would reflect an uneasy 8.7% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing UK£103m of revenue in 2021. The consensus view seems to have become more pessimistic on Great Portland Estates, noting the substantial drop in revenue estimates in this update.
There was no particular change to the consensus price target of UK£6.97, with Great Portland Estates' latest outlook seemingly not enough to result in a change of valuation. 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 Great Portland Estates at UK£9.65 per share, while the most bearish prices it at UK£5.50. This shows there is still some 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 8.7%, a significant reduction from annual growth of 10% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.3% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Great Portland Estates is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Great Portland Estates after today.
Unanswered questions? We have estimates for Great Portland Estates from its eleven analysts out until 2023, and you can see them free on our platform here.
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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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