Commerce Bancshares, Inc. (NASDAQ:CBSH) just released its latest quarterly results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.7% to hit US$349m. Commerce Bancshares also reported a statutory profit of US$1.11, which was an impressive 58% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Commerce Bancshares' six analysts is for revenues of US$1.35b in 2021, which would reflect a solid 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 21% to US$3.42. In the lead-up to this report, the analysts had been modelling revenues of US$1.32b and earnings per share (EPS) of US$3.12 in 2021. 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.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$59.00, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on Commerce Bancshares, with the most bullish analyst valuing it at US$72.00 and the most bearish at US$40.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Commerce Bancshares' rate of growth is expected to accelerate meaningfully, with the forecast 14% revenue growth noticeably faster than its historical growth of 3.7%p.a. 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 1.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Commerce Bancshares 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 Commerce Bancshares following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Commerce Bancshares going out to 2022, and you can see them free on our platform here..
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