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Earnings Update: Here's Why Analysts Just Lifted Their Lifestyle Communities Limited (ASX:LIC) Price Target To AU$19.29

Investors in Lifestyle Communities Limited (ASX:LIC) had a good week, as its shares rose 2.6% to close at AU$17.44 following the release of its full-year results. Results were roughly in line with estimates, with revenues of AU$224m and statutory earnings per share of AU$0.85. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Lifestyle Communities

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earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from Lifestyle Communities' four analysts is for revenues of AU$245.1m in 2023, which would reflect a notable 9.2% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to drop 15% to AU$0.72 in the same period. Before this earnings report, the analysts had been forecasting revenues of AU$249.7m and earnings per share (EPS) of AU$0.98 in 2023. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

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Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 5.1% to AU$19.29, suggesting the revised estimates are not indicative of a weaker long-term future for the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Lifestyle Communities, with the most bullish analyst valuing it at AU$25.75 and the most bearish at AU$15.60 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 9.2% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.0% annually. So although Lifestyle Communities is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Lifestyle Communities. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Lifestyle Communities. 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 Lifestyle Communities going out to 2025, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Lifestyle Communities (1 shouldn't be ignored!) that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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