One thing we could say about the analysts on W. P. Carey Inc. (NYSE:WPC) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 current consensus, from the three analysts covering W. P. Carey, is for revenues of US$1.1b in 2020, which would reflect a not inconsiderable 9.4% reduction in W. P. Carey's sales over the past 12 months. Before the latest update, the analysts were foreseeing US$1.3b of revenue in 2020. It looks like forecasts have become a fair bit less optimistic on W. P. Carey, given the measurable cut to revenue estimates.
Notably, the analysts have cut their price target 5.8% to US$77.33, suggesting concerns around W. P. Carey's 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. There are some variant perceptions on W. P. Carey, with the most bullish analyst valuing it at US$92.00 and the most bearish at US$60.00 per share. 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.
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 sales are expected to reverse, with the forecast 9.4% revenue decline a notable change from historical growth of 4.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.7% annually for the foreseeable future. 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 analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of W. P. Carey.
But wait - there's more! At least one of W. P. Carey's three analysts has provided estimates out to 2021, which can be seen for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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