Yahoo Finance Vital Healthcare Property Trust (NZSE:VHP): Are Analysts Bull Or Bear?
Vital Healthcare Property Trust's (NZSE:VHP) latest earnings update in August 2019 revealed that the company endured a minor headwind with earnings declining from NZ$100m to NZ$93m, a change of -6.6%. Below is a brief commentary on my key takeaways on how market analysts perceive Vital Healthcare Property Trust's earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Vital Healthcare Property Trust
Analysts' expectations for the upcoming year seems pessimistic, with earnings falling by a double-digit -29%. Over the medium term, earnings are expected to continue to be below today's level, with a decline of -23% in 2021, eventually reaching NZ$72m in 2022.
Although it’s useful to be aware of the growth rate year by year relative to today’s value, it may be more valuable evaluating the rate at which the earnings are moving on average every year. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Vital Healthcare Property Trust's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -8.8%. This means that, we can assume Vital Healthcare Property Trust will chip away at a rate of -8.8% every year for the next few years.
Next Steps:
For Vital Healthcare Property Trust, I've compiled three key aspects you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is VHP worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether VHP is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of VHP? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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. Thank you for reading.
