Results: Horizon Bancorp, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

By
Simply Wall St
Published
October 30, 2020
NasdaqGS:HBNC

As you might know, Horizon Bancorp, Inc. (NASDAQ:HBNC) just kicked off its latest quarterly results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$60m, some 5.5% above estimates, and statutory earnings per share (EPS) coming in at US$0.46, 29% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Horizon Bancorp

earnings-and-revenue-growth
NasdaqGS:HBNC Earnings and Revenue Growth October 30th 2020

Taking into account the latest results, the most recent consensus for Horizon Bancorp from four analysts is for revenues of US$218.5m in 2021 which, if met, would be a meaningful 8.1% increase on its sales over the past 12 months. Statutory earnings per share are forecast to decline 16% to US$1.23 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$216.5m and earnings per share (EPS) of US$1.21 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$14.00. 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 Horizon Bancorp analyst has a price target of US$15.00 per share, while the most pessimistic values it at US$13.00. 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. It's pretty clear that there is an expectation that Horizon Bancorp's revenue growth will slow down substantially, with revenues next year expected to grow 8.1%, compared to a historical growth rate of 15% 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 1.3% next year. Even after the forecast slowdown in growth, it seems obvious that Horizon Bancorp is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$14.00, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Horizon Bancorp. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Horizon Bancorp analysts - going out to 2022, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Horizon Bancorp that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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