The yearly results for Independent Bank Corp. (NASDAQ:INDB) were released last week, making it a good time to revisit its performance. Results were roughly in line with estimates, with revenues of US$502m and statutory earnings per share of US$5.03. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see analysts’ latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, Independent Bank’s two analysts currently expect revenues in 2020 to be US$509.2m, approximately in line with the last 12 months. Statutory earnings per share are expected to rise 5.9% to US$5.33. Yet prior to the latest earnings, analysts had been forecasting revenues of US$519.7m and earnings per share (EPS) of US$5.43 in 2020. So it looks like analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is expected to maintain EPS.
The average price target was steady at US$87.63 even though revenue estimates declined; likely suggesting analysts place a higher value on earnings.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Independent Bank’s past performance and to peers in the same market. We would highlight that Independent Bank’s revenue growth is expected to slow, with forecast 1.3% increase next year well below the historical 12%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 4.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that analysts still expect Independent Bank to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$87.63, 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. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.
You can also view our analysis of Independent Bank’s balance sheet, and whether we think Independent Bank 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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