NexPoint Real Estate Finance, Inc. (NYSE:NREF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year’s forecasts. The analysts have sharply increased their revenue numbers, with a view that NexPoint Real Estate Finance will make substantially more sales than they’d previously expected.
Following the upgrade, the most recent consensus for NexPoint Real Estate Finance from its three analysts is for revenues of US$42m in 2020 which, if met, would be a huge increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$37m of revenue in 2020. It looks like there’s been a clear increase in optimism around NexPoint Real Estate Finance, given the solid increase in revenue forecasts.
Notably, the analysts have cut their price target 5.6% to US$17.00, suggesting concerns around NexPoint Real Estate Finance’s valuation. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic NexPoint Real Estate Finance analyst has a price target of US$19.00 per share, while the most pessimistic values it at US$14.00. This is a very narrow spread of estimates, implying either that NexPoint Real Estate Finance is an easy company to value, or – more likely – the analysts are relying heavily on some key assumptions.