As you might know, Farmers National Banc Corp. (NASDAQ:FMNB) recently reported its yearly numbers. Results look mixed – while revenue fell marginally short of analyst estimates at US$109m, statutory earnings beat expectations 2.4%, with Farmers National Banc reporting profits of US$1.28 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see analysts’ latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Farmers National Banc from three analysts is for revenues of US$124.5m in 2020, which is a meaningful 15% increase on its sales over the past 12 months. Statutory earnings per share are expected to rise 3.9% to US$1.34. In the lead-up to this report, analysts had been modelling revenues of US$123.5m and earnings per share (EPS) of US$1.31 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
There’s been no major changes to the consensus price target of US$16.88, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock’s valuation. 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. There are some variant perceptions on Farmers National Banc, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$16.50 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
In addition, we can look to Farmers National Banc’s past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We can infer from the latest estimates that analysts are expecting a continuation of Farmers National Banc’s historical trends, as next year’s forecast 15% revenue growth is roughly in line with 14% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.0% per year. So it’s pretty clear that Farmers National Banc is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Farmers National Banc following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$16.88, with the latest estimates not enough to have an impact on analysts’ estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for Farmers National Banc going out to 2021, and you can see them free on our platform here.
You can also view our analysis of Farmers National Banc’s balance sheet, and whether we think Farmers National Banc is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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