Columbia Banking System, Inc. (NASDAQ:COLB) just released its latest quarterly results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.5% to hit US$149m. Columbia Banking System also reported a statutory profit of US$0.63, which was an impressive 55% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Columbia Banking System's five analysts is for revenues of US$546.3m in 2021, which would reflect a satisfactory 7.3% increase on its sales over the past 12 months. Statutory earnings per share are forecast to reduce 5.4% to US$1.87 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$547.9m and earnings per share (EPS) of US$1.76 in 2021. So the consensus seems to have become somewhat more optimistic on Columbia Banking System's earnings potential following these results.
The consensus price target was unchanged at US$32.50, 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 Columbia Banking System analyst has a price target of US$35.00 per share, while the most pessimistic values it at US$30.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Columbia Banking System is an easy business to forecast or the the analysts are all using similar assumptions.
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. We can infer from the latest estimates that forecasts expect a continuation of Columbia Banking System'shistorical trends, as next year's 7.3% revenue growth is roughly in line with 8.2% annual revenue growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 1.1% next year. So it's pretty clear that Columbia Banking System is forecast to grow substantially faster than its 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 Columbia Banking System following these results. Happily, there were no major changes to revenue forecasts, with the business still expected 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 Columbia Banking System going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Columbia Banking System .
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