The OTP Bank Nyrt. (BUSE:OTP) Second-Quarter Results Are Out And Analysts Have Published New Forecasts

Investors in OTP Bank Nyrt. (BUSE:OTP) had a good week, as its shares rose 2.5% to close at Ft17,675 following the release of its quarterly results. It was a workmanlike result, with revenues of Ft640b coming in 3.7% ahead of expectations, and statutory earnings per share of Ft3,693, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for OTP Bank Nyrt

After the latest results, the eleven analysts covering OTP Bank Nyrt are now predicting revenues of Ft2.47t in 2024. If met, this would reflect a meaningful 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 3.5% to Ft3,483. In the lead-up to this report, the analysts had been modelling revenues of Ft2.41t and earnings per share (EPS) of Ft3,634 in 2024. So it's pretty clear consensus is mixed on OTP Bank Nyrt after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.

There's been no major changes to the price target of Ft21,195, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic OTP Bank Nyrt analyst has a price target of Ft24,000 per share, while the most pessimistic values it at Ft18,917. This is a very narrow spread of estimates, implying either that OTP Bank Nyrt is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting OTP Bank Nyrt's growth to accelerate, with the forecast 35% annualised growth to the end of 2024 ranking favourably alongside historical growth of 19% 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 3.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that OTP Bank Nyrt is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for OTP Bank Nyrt. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at Ft21,195, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple OTP Bank Nyrt analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for OTP Bank Nyrt (1 doesn't sit too well with us!) that you need to be mindful of.

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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.