One CF Bankshares Inc. (NASDAQ:CFBK) Analyst Is Reducing Their Forecasts For This Year

Today is shaping up negative for CF Bankshares Inc. (NASDAQ:CFBK) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following this downgrade, CF Bankshares' one analyst are forecasting 2022 revenues to be US$49m, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 8.2% to US$2.75. Prior to this update, the analyst had been forecasting revenues of US$57m and earnings per share (EPS) of US$3.26 in 2022. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

View our latest analysis for CF Bankshares

Despite the cuts to forecast earnings, there was no real change to the US$24.00 price target, showing that the analyst don't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 2.3% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 36% 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 1.6% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CF Bankshares is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for CF Bankshares. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of CF Bankshares.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for CF Bankshares going out as far as 2023, 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.