Need To Know: Analysts Are Much More Bullish On First Hawaiian, Inc. (NASDAQ:FHB) Revenues

First Hawaiian, Inc. (NASDAQ:FHB) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following this upgrade, First Hawaiian's six analysts are forecasting 2023 revenues to be US$792m, approximately in line with the last 12 months. Per-share earnings are expected to swell 11% to US$2.33. Prior to this update, the analysts had been forecasting revenues of US$700m and earnings per share (EPS) of US$2.31 in 2023. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

See our latest analysis for First Hawaiian

Even though revenue forecasts increased, there was no change to the consensus price target of US$26.79, suggesting the analysts are focused on earnings as the driver of value creation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on First Hawaiian, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$23.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the First Hawaiian's past performance and to peers in the same industry. It's pretty clear that there is an expectation that First Hawaiian's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 0.06% growth on an annualised basis. This is compared to a historical growth rate of 0.6% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that First Hawaiian is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues 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 First Hawaiian.

Better yet, our automated discounted cash flow calculation (DCF) suggests First Hawaiian could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.