As you might know, Heartland Financial USA, Inc. (NASDAQ:HTLF) just kicked off its latest third-quarter results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$154m, some 2.6% above estimates, and statutory earnings per share (EPS) coming in at US$1.23, 35% ahead of expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Heartland Financial USA from four analysts is for revenues of US$669.0m in 2021 which, if met, would be a substantial 33% increase on its sales over the past 12 months. Statutory per-share earnings are expected to be US$3.57, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$626.7m and earnings per share (EPS) of US$3.12 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a solid gain to earnings per share in particular.
It will come as no surprise to learn that the analysts have increased their price target for Heartland Financial USA 6.9% to US$38.50on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Heartland Financial USA, with the most bullish analyst valuing it at US$39.00 and the most bearish at US$32.00 per share. This is a very narrow spread of estimates, implying either that Heartland Financial USA is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Heartland Financial USA's growth to accelerate, with the forecast 33% growth ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.3% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Heartland Financial USA is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Heartland Financial USA's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 Heartland Financial USA going out to 2022, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 1 warning sign for Heartland Financial USA you should be aware of.
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