Last week saw the newest third-quarter earnings release from Franklin Street Properties Corp. (NYSEMKT:FSP), an important milestone in the company's journey to build a stronger business. Revenues were in line with expectations, at US$62m, while statutory losses ballooned to US$0.02 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Franklin Street Properties
Taking into account the latest results, Franklin Street Properties' three analysts currently expect revenues in 2021 to be US$255.0m, approximately in line with the last 12 months. Earnings are expected to improve, with Franklin Street Properties forecast to report a statutory profit of US$0.03 per share. Before this earnings report, the analysts had been forecasting revenues of US$253.0m and earnings per share (EPS) of US$0.025 in 2021. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target fell 9.8% to US$5.75, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Franklin Street Properties at US$6.50 per share, while the most bearish prices it at US$5.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.01%, a significant reduction from annual growth of 1.9% 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 6.0% annually for the foreseeable future. It's pretty clear that Franklin Street Properties' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Franklin Street Properties following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Franklin Street Properties going out to 2022, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 3 warning signs for Franklin Street Properties you should be aware of, and 1 of them is potentially serious.
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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