One thing we could say about the covering analyst on Carindale Property Trust (ASX:CDP) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the latest downgrade, the current consensus, from the single analyst covering Carindale Property Trust, is for revenues of AU$34m in 2020, which would reflect a substantial 35% reduction in Carindale Property Trust's sales over the past 12 months. Statutory earnings per share are expected to be AU$0.30, roughly flat on the last 12 months. Previously, the analyst had been modelling revenues of AU$38m and earnings per share (EPS) of AU$0.35 in 2020. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.

View our latest analysis for Carindale Property Trust  ASX:CDP Past and Future Earnings April 29th 2020

Despite the cuts to forecast earnings, there was no real change to the AU$3.50 price target, showing that the analyst don't think the changes have a meaningful impact on its intrinsic value.

Of course, another way to look at these forecasts is to place them into context against the industry itself. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue shrink 1.3% per year. While this is interesting, Carindale Property Trust's, revenues are still expected to shrink next year, and at a faster rate than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also downgraded their revenue estimates, and our aggregation of analyst estimates suggests that Carindale Property Trust revenue is expected to perform worse than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Carindale Property Trust after the downgrade.



Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Carindale Property Trust going out as far as 2022, 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.

If you spot an error that warrants correction, please contact the editor at [email protected]. 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.

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