Results: Lakeland Financial Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

By
Simply Wall St
Published
October 29, 2020
NasdaqGS:LKFN

Lakeland Financial Corporation (NASDAQ:LKFN) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 5.5% to hit US$54m. Lakeland Financial also reported a statutory profit of US$0.89, which was an impressive 24% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Lakeland Financial

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NasdaqGS:LKFN Earnings and Revenue Growth October 29th 2020

Taking into account the latest results, the current consensus from Lakeland Financial's four analysts is for revenues of US$213.4m in 2021, which would reflect a meaningful 13% increase on its sales over the past 12 months. Statutory earnings per share are expected to decrease 9.7% to US$2.90 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$201.3m and earnings per share (EPS) of US$2.56 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice increase in earnings per share in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.5% to US$48.00per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Lakeland Financial at US$49.00 per share, while the most bearish prices it at US$46.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Lakeland Financial is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Lakeland Financial's rate of growth is expected to accelerate meaningfully, with the forecast 13% revenue growth noticeably faster than its historical growth of 7.8%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Lakeland Financial 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 Lakeland Financial'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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Lakeland Financial analysts - going out to 2022, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Lakeland Financial (at least 1 which is potentially serious) , and understanding them should be part of your investment process.

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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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