Tanger Factory Outlet Centers, Inc. (NYSE:SKT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year’s forecasts. The analysts have sharply increased their revenue numbers, with a view that Tanger Factory Outlet Centers will make substantially more sales than they’d previously expected.
After the upgrade, the consensus from Tanger Factory Outlet Centers’ six analysts is for revenues of US$421m in 2022, which would reflect a perceptible 3.2% decline in sales compared to the last year of performance. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$0.67 per share next year. Previously, the analysts had been modelling revenues of US$369m and earnings per share (EPS) of US$0.62 in 2022. The most recent forecasts are noticeably more optimistic, with a substantial gain in revenue estimates and a lift to earnings per share as well.
NYSE:SKT Earnings and Revenue Growth December 3rd 2021
Despite these upgrades, the analysts have not made any major changes to their price target of US$20.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Tanger Factory Outlet Centers at US$23.00 per share, while the most bearish prices it at US$17.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Tanger Factory Outlet Centers shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2022 compared to the historical decline of 3.8% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 7.8% annually. So it’s pretty clear that, while it does have declining revenues, the analysts also expect Tanger Factory Outlet Centers to suffer worse than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Tanger Factory Outlet Centers.
Analysts are clearly in love with Tanger Factory Outlet Centers at the moment, but before diving in – you should be aware that we’ve identified some warning flags with the business, such as dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 3 other risks we’ve identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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