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Vornado Realty Trust Annual Results Just Came Out: Here's What Analysts Are Forecasting For Next Year

Last week, you might have seen that Vornado Realty Trust (NYSE:VNO) released its annual result to the market. The early response was not positive, with shares down 4.9% to US$64.38 in the past week. It was a credible result overall, with revenues of US$1.9b and statutory earnings per share of US$16.21 both in line with analyst estimates, showing that Vornado Realty Trust is executing in line with expectations. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.

Check out our latest analysis for Vornado Realty Trust

NYSE:VNO Past and Future Earnings, February 20th 2020
NYSE:VNO Past and Future Earnings, February 20th 2020

After the latest results, the consensus from Vornado Realty Trust's five analysts is for revenues of US$1.82b in 2020, which would reflect a noticeable 5.6% decline in sales compared to the last year of performance. Statutory earnings per share are expected to dive 94% to US$0.94 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$1.82b and earnings per share (EPS) of US$1.03 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$70.13, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Vornado Realty Trust, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$64.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.

Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. One thing that stands out from these estimates is that, even though revenues are forecast to keep falling, the decline is expected to accelerate. Analysts have modelled a 5.6% decline next year, compared to a historical decline of 2.6% per annum for the past five years. Compare this with our data on other companies (with analyst coverage) in a similar industry, which in aggregate are forecast to see their revenue decline 5.0% per year. So it looks like Vornado Realty Trust is also expected to see its revenues decline at a faster rate than the wider market.

The Bottom Line

The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Vornado Realty Trust. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Vornado Realty Trust's revenues are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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

You can also view our analysis of Vornado Realty Trust's balance sheet, and whether we think Vornado Realty Trust is carrying too much debt, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.