Investors Bancorp, Inc. Just Recorded A 31% EPS Beat: Here's What Analysts Are Forecasting Next

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

As you might know, Investors Bancorp, Inc. (NASDAQ:ISBC) just kicked off its latest quarterly results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 3.8% to hit US$202m. Investors Bancorp also reported a statutory profit of US$0.27, which was an impressive 31% above what the analysts had forecast. 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 Investors Bancorp

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

Taking into account the latest results, the consensus forecast from Investors Bancorp's six analysts is for revenues of US$813.3m in 2021, which would reflect a meaningful 17% improvement in sales compared to the last 12 months. Per-share earnings are expected to accumulate 9.9% to US$0.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$808.2m and earnings per share (EPS) of US$0.86 in 2021. So the consensus seems to have become somewhat more optimistic on Investors Bancorp's earnings potential following these results.

There's been no major changes to the consensus price target of US$11.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Investors Bancorp, with the most bullish analyst valuing it at US$11.50 and the most bearish at US$10.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong 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 Investors Bancorp's past performance and to peers in the same industry. The analysts are definitely expecting Investors Bancorp's growth to accelerate, with the forecast 17% growth ranking favourably alongside historical growth of 2.4% 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. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Investors Bancorp to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Investors Bancorp following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$11.00, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Investors Bancorp going out to 2022, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Investors Bancorp that you need to be mindful 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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