Industry Analysts Just Made A Captivating Upgrade To Their MidWestOne Financial Group, Inc. (NASDAQ:MOFG) Revenue Forecasts

Celebrations may be in order for MidWestOne Financial Group, Inc. (NASDAQ:MOFG) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for next year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. Investor sentiment seems to be improving too, with the share price up 7.2% to US$32.72 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the latest upgrade, MidWestOne Financial Group's five analysts currently expect revenues in 2023 to be US$201m, approximately in line with the last 12 months. Per-share earnings are expected to increase 7.0% to US$4.05. Prior to this update, the analysts had been forecasting revenues of US$180m and earnings per share (EPS) of US$3.83 in 2023. The forecasts seem more optimistic now, with a decent improvement in revenue and a small lift in earnings per share estimates.

Our analysis indicates that MOFG is potentially undervalued!

It will come as no surprise to learn that the analysts have increased their price target for MidWestOne Financial Group 7.8% to US$35.80 on the back of these upgrades. 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. There are some variant perceptions on MidWestOne Financial Group, with the most bullish analyst valuing it at US$38.00 and the most bearish at US$34.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.0% by the end of 2023. This indicates a significant reduction from annual growth of 15% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.2% annually for the foreseeable future. It's pretty clear that MidWestOne Financial Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at MidWestOne Financial Group.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for MidWestOne Financial Group going out to 2024, and you can see them free on our platform here..

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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.