Yahoo Finance The Consensus EPS Estimates For TPG RE Finance Trust, Inc. (NYSE:TRTX) Just Fell A Lot
One thing we could say about the analysts on TPG RE Finance Trust, Inc. (NYSE:TRTX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the latest downgrade, the three analysts covering TPG RE Finance Trust provided consensus estimates of US$108m revenue in 2020, which would reflect a substantial 38% decline on its sales over the past 12 months. Losses are supposed to balloon 26% to US$2.27 per share. Prior to this update, the analysts had been forecasting revenues of US$147m and earnings per share (EPS) of US$0.26 in 2020. There looks to have been a major change in sentiment regarding TPG RE Finance Trust's prospects, with a pretty serious reduction to revenues and the analysts now forecasting a loss instead of a profit.
View our latest analysis for TPG RE Finance Trust
The consensus price target fell 17% to US$10.42, implicitly signalling that lower earnings per share are a leading indicator for TPG RE Finance Trust's 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 TPG RE Finance Trust at US$22.00 per share, while the most bearish prices it at US$4.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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 38%, a significant reduction from annual growth of 17% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 51% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - TPG RE Finance Trust is expected to lag the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for TPG RE Finance Trust dropped from profits to a loss this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of TPG RE Finance Trust.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with TPG RE Finance Trust's financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other warning signs we've identified.
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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