Bank of Marin Bancorp (NASDAQ:BMRC) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results look mixed - while revenue fell marginally short of analyst estimates at US$99m, statutory earnings beat expectations 5.7%, with Bank of Marin Bancorp reporting profits of US$2.22 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Bank of Marin Bancorp's five analysts are now forecasting revenues of US$103.5m in 2021. This would be a credible 4.0% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to sink 15% to US$1.97 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$103.2m and earnings per share (EPS) of US$1.88 in 2021. So the consensus seems to have become somewhat more optimistic on Bank of Marin Bancorp's earnings potential following these results.
The consensus price target was unchanged at US$40.75, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Bank of Marin Bancorp analyst has a price target of US$41.00 per share, while the most pessimistic values it at US$39.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Bank of Marin Bancorp's revenue growth will slow down substantially, with revenues next year expected to grow 4.0%, compared to a historical growth rate of 7.2% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.3% next year. Factoring in the forecast slowdown in growth, it seems obvious that Bank of Marin Bancorp is also expected to grow slower than other industry participants.
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 Bank of Marin Bancorp following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$40.75, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Bank of Marin Bancorp going out to 2022, 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 Bank of Marin Bancorp (of which 1 is concerning!) you should know about.
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