Analysts Are Upgrading Íslandsbanki hf. (ICE:ISB) After Its Latest Results

It's been a good week for Íslandsbanki hf. (ICE:ISB) shareholders, because the company has just released its latest full-year results, and the shares gained 7.0% to Kr128. It was a pretty mixed result, with revenues beating expectations to hit Kr59b. Statutory earnings fell 3.4% short of analyst forecasts, reaching Kr12.19 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Íslandsbanki hf

Following the latest results, Íslandsbanki hf's four analysts are now forecasting revenues of Kr67.0b in 2023. This would be a meaningful 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to ascend 15% to Kr14.01. Yet prior to the latest earnings, the analysts had been anticipated revenues of Kr63.0b and earnings per share (EPS) of Kr12.76 in 2023. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of Kr134, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Íslandsbanki hf analyst has a price target of Kr160 per share, while the most pessimistic values it at Kr120. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Íslandsbanki hf is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Íslandsbanki hf's growth to accelerate, with the forecast 14% annualised growth to the end of 2023 ranking favourably alongside historical growth of 4.8% 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 6.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Íslandsbanki hf to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Íslandsbanki hf following these results. 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 Kr134, 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 Íslandsbanki hf analysts - going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Íslandsbanki hf you should be aware 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.