These Analysts Just Made A Substantial Downgrade To Their Bank of Marin Bancorp (NASDAQ:BMRC) EPS Forecasts

Market forces rained on the parade of Bank of Marin Bancorp (NASDAQ:BMRC) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the consensus from five analysts covering Bank of Marin Bancorp is for revenues of US$120m in 2023, implying an uncomfortable 13% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to tumble 32% to US$1.93 in the same period. Previously, the analysts had been modelling revenues of US$134m and earnings per share (EPS) of US$2.62 in 2023. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for Bank of Marin Bancorp

It'll come as no surprise then, to learn that the analysts have cut their price target 13% to US$24.60. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Bank of Marin Bancorp at US$35.00 per share, while the most bearish prices it at US$18.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 16% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 7.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.2% annually for the foreseeable future. It's pretty clear that Bank of Marin Bancorp's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Bank of Marin Bancorp analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.