Mapletree Commercial Trust Just Beat EPS By 70%: Here's What Analysts Think Will Happen Next

As you might know, Mapletree Commercial Trust (SGX:N2IU) just kicked off its latest full-year results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of S$483m, some 2.3% above estimates, and statutory earnings per share (EPS) coming in at S$0.18, 70% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Mapletree Commercial Trust

SGX:N2IU Past and Future Earnings May 31st 2020
SGX:N2IU Past and Future Earnings May 31st 2020

Taking into account the latest results, Mapletree Commercial Trust's eleven analysts currently expect revenues in 2021 to be S$473.3m, approximately in line with the last 12 months. Statutory earnings per share are forecast to plummet 56% to S$0.078 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$469.9m and earnings per share (EPS) of S$0.076 in 2021. So the consensus seems to have become somewhat more optimistic on Mapletree Commercial Trust's earnings potential following these results.

There's been no major changes to the consensus price target of S$2.02, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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. Currently, the most bullish analyst values Mapletree Commercial Trust at S$2.44 per share, while the most bearish prices it at S$1.45. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Mapletree Commercial Trust shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 2.0%, a significant reduction from annual growth of 12% 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 4.3% annually for the foreseeable future. It's pretty clear that Mapletree Commercial Trust's 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 Mapletree Commercial Trust 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. The consensus price target held steady at S$2.02, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Mapletree Commercial Trust. 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 Mapletree Commercial Trust going out to 2024, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 5 warning signs for Mapletree Commercial Trust (of which 2 don't sit too well with us!) you should know about.

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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. Thank you for reading.