Bryn Mawr Bank Corporation (NASDAQ:BMTC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Bryn Mawr Bank will make substantially more sales than they'd previously expected.
Following the latest upgrade, the current consensus, from the five analysts covering Bryn Mawr Bank, is for revenues of US$157m in 2021, which would reflect a considerable 14% reduction in Bryn Mawr Bank's sales over the past 12 months. Statutory earnings per share are presumed to surge 68% to US$2.75. Prior to this update, the analysts had been forecasting revenues of US$141m and earnings per share (EPS) of US$2.58 in 2021. The forecasts seem more optimistic now, with a nice gain to revenue and a small lift in earnings per share estimates.
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$37.35, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. The most optimistic Bryn Mawr Bank analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$31.75. This is a very narrow spread of estimates, implying either that Bryn Mawr Bank is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 14% revenue decline a notable change from historical growth of 6.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.3% next year. It's pretty clear that Bryn Mawr Bank's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Bryn Mawr Bank.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Bryn Mawr Bank analysts - going out to 2022, 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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