Investors in W. P. Carey Inc. (NYSE:WPC) had a good week, as its shares rose 4.4% to close at US$55.07 following the release of its third-quarter results. Revenues of US$449m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.58, missing estimates by 8.7%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for W. P. Carey
After the latest results, the consensus from W. P. Carey's five analysts is for revenues of US$1.68b in 2024, which would reflect a noticeable 2.5% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to nosedive 42% to US$2.06 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.70b and earnings per share (EPS) of US$2.17 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$61.06, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values W. P. Carey at US$69.00 per share, while the most bearish prices it at US$52.00. This is a very narrow spread of estimates, implying either that W. P. Carey is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the W. P. Carey's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 2.0% annualised decline to the end of 2024. That is a notable change from historical growth of 11% 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 5.8% per year. It's pretty clear that W. P. Carey's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that W. P. Carey's revenue is expected to perform worse than the wider industry. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on W. P. Carey. 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 W. P. Carey 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 4 warning signs for W. P. Carey (2 are potentially serious) you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.