Yahoo Finance Growth Investors: Industry Analysts Just Upgraded Their Australian Unity Office Fund (ASX:AOF) Revenue Forecasts By 25%
Australian Unity Office Fund (ASX:AOF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.
Following the latest upgrade, the current consensus, from the three analysts covering Australian Unity Office Fund, is for revenues of AU$28m in 2023, which would reflect a sizeable 43% reduction in Australian Unity Office Fund's sales over the past 12 months. Losses are predicted to fall substantially, shrinking 56% to AU$0.13. However, before this estimates update, the consensus had been expecting revenues of AU$22m and AU$0.13 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts noticeably increasing their revenue forecasts while also expecting losses per share to hold steady.
See our latest analysis for Australian Unity Office Fund
The consensus price target fell 25% to AU$1.60 asthe analysts signal that ongoing losses are likely to weigh on the stock price. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Australian Unity Office Fund at AU$1.91 per share, while the most bearish prices it at AU$1.32. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Australian Unity Office Fund's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 43% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 3.1% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 5.5% per year. So it's pretty clear that Australian Unity Office Fund's revenues are expected to shrink faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Australian Unity Office Fund is moving incrementally towards profitability. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Australian Unity Office Fund.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Australian Unity Office Fund analysts - going out to 2025, and you can see them 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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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.
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