AOF) 25% revenue forecast

Australian Unity Office Fund (ASX:AOF) Shareholders will have a reason to smile today as analysts deliver substantial improvements to this year’s forecast. The revenue forecast for this year has seen a facelift, with analysts now much more optimistic about its sales pipeline.

Following the latest update, the current consensus, from the three analysts covering the Australian Unity Office Fund, expects revenue of A$28 million in 2023, which would reflect a massive 43% reduction in sales from the Australian Unity Office Fund in the last 12 months. Losses are expected to drop significantly, narrowing by 56% to AU$0.13. However, prior to this estimate update, the consensus was expecting revenue of A$22 million and losses of A$0.13 per share. So there has been quite a shift in sentiment after recent consensus updates, with analysts significantly raising their earnings forecasts while expecting per-share losses to remain flat.

See our latest analysis for Australian Unity Office Fund

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The consensus price target fell 25% to AU$1.60, with analysts signaling ongoing losses should weigh on the stock price. Fixing on a single price target, however, can be unwise because the consensus target is actually the average of the analysts’ price targets. As a result, some investors like to look at the range of estimates to see if there are any differing opinions on the company’s valuation. Currently, the most bullish analyst values ​​the Australian Unity Office Fund at AU$1.91 per share, while the most bearish one values ​​it at AU$1.32. There are certainly different views on the stock, but the range of estimates is not wide enough to imply that the situation is unpredictable, in our view.

These estimates are interesting, but it may be useful to draw broader lines when seeing how the predictions compare, both to the Australian Unity Office Fund’s past performance and to peers in the same sector. We highlight that sales are expected to reverse, with an expected decline in annualized revenue of 43% through the end of 2023. This is a notable change from the historical growth of 3.1% during of the last five years. Still, analysts’ aggregate estimates for other companies in the industry suggest that industry revenue is set to decline 5.5% annually. So it’s pretty clear that Australian Unity Office Fund revenue is set to decline faster than the industry as a whole.

The essential

The highlight for us was that the consensus cut its estimated losses this year, perhaps suggesting that the Australian Unity Office Fund is gradually heading towards profitability. They also updated their revenue estimates as sales apparently performed well, although revenue growth is expected to decline relative to the broader market this year. Additionally, there has been a reduction in the price target, suggesting that recent news has led to more pessimism about the company’s intrinsic value. Given this year’s dramatic forecast update, it might be time to take another look at the Australian Unity Office Fund.

Yet the company’s long-term outlook is far more relevant than next year’s earnings. We have estimates – from several analysts at the Australian Unity Office Fund – going out to 2025, and you can see them for free on our platform here.

Another way to search for interesting businesses that might be reach an inflection point is to track whether management is buying or selling, with our free list of growing companies insiders are buying.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Jose C. Birney