Here's What Analysts Are Forecasting For First Defiance Financial Corp. (NASDAQ:FDEF) After Its Full-Year Results

Shareholders in First Defiance Financial Corp. (NASDAQ:FDEF) had a terrible week, as shares crashed 30% to US$13.46 in the week since its latest yearly results. First Defiance Financial reported in line with analyst predictions, delivering revenues of US$158m and statutory earnings per share of US$2.48, suggesting the business is executing well and in line with its plan. 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.

View our latest analysis for First Defiance Financial

After the latest results, the four analysts covering First Defiance Financial are now predicting revenues of US$271.4m in 2020. If met, this would reflect a substantial 72% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to nosedive 29% to US$1.76 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$275.9m and earnings per share (EPS) of US$2.02 in 2020. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The consensus price target held steady at US$32.67, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on First Defiance Financial, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$29.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. The analysts are definitely expecting First Defiance Financial's growth to accelerate, with the forecast 72% growth ranking favourably alongside historical growth of 10% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect First Defiance Financial to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$32.67, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on First Defiance Financial. Long-term earnings power is much more important than next year's profits. We have forecasts for First Defiance Financial going out to 2021, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for First Defiance Financial you should know about.

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