What You Need To Know About The First Hawaiian, Inc. (NASDAQ:FHB) Analyst Downgrade Today

The latest analyst coverage could presage a bad day for First Hawaiian, Inc. (NASDAQ:FHB), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the current consensus, from the eight analysts covering First Hawaiian, is for revenues of US$543m in 2022, which would reflect a disturbing 28% reduction in First Hawaiian's sales over the past 12 months. Statutory earnings per share are supposed to sink 17% to US$1.73 in the same period. Previously, the analysts had been modelling revenues of US$628m and earnings per share (EPS) of US$1.77 in 2022. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

Check out our latest analysis for First Hawaiian

Analysts made no major changes to their price target of US$29.56, suggesting the downgrades are not expected to have a long-term impact on First Hawaiian's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values First Hawaiian at US$33.00 per share, while the most bearish prices it at US$26.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting First Hawaiian is an easy business to forecast or the underlying assumptions are obvious.

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. One more thing stood out to us about these estimates, and it's the idea that First Hawaiian's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 28% to the end of 2022. This tops off a historical decline of 0.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.9% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect First Hawaiian to suffer worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for First Hawaiian. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that First Hawaiian's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of First Hawaiian going forwards.

That said, the analysts might have good reason to be negative on First Hawaiian, given recent substantial insider selling. Learn more, and discover the 2 other concerns we've identified, for free on our platform here.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.