Analysts Have Been Trimming Their Dime Community Bancshares, Inc. (NASDAQ:DCOM) Price Target After Its Latest Report

Last week, you might have seen that Dime Community Bancshares, Inc. (NASDAQ:DCOM) released its full-year result to the market. The early response was not positive, with shares down 9.3% to US$29.76 in the past week. Revenues came in 2.2% below expectations, at US$413m. Statutory earnings per share were relatively better off, with a per-share profit of US$3.73 being roughly in line with analyst estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Dime Community Bancshares

Taking into account the latest results, the most recent consensus for Dime Community Bancshares from five analysts is for revenues of US$436.0m in 2023 which, if met, would be a credible 5.7% increase on its sales over the past 12 months. Statutory earnings per share are expected to dip 2.7% to US$3.67 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$451.8m and earnings per share (EPS) of US$4.03 in 2023. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The consensus price target fell 6.7% to US$36.40, with the weaker earnings outlook clearly leading valuation estimates. 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 Dime Community Bancshares analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$34.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Dime Community Bancshares' revenue growth is expected to slow, with the forecast 5.7% annualised growth rate until the end of 2023 being well below the historical 26% p.a. growth over the last five years. Compare this to the 667 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.5% per year. Factoring in the forecast slowdown in growth, it looks like Dime Community Bancshares is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Dime Community Bancshares. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Dime Community Bancshares' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Dime Community Bancshares analysts - going out to 2024, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Dime Community Bancshares .

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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.