New Forecasts: Here's What Analysts Think The Future Holds For Orrstown Financial Services, Inc. (NASDAQ:ORRF)

Orrstown Financial Services, Inc. (NASDAQ:ORRF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 4.9% over the past week, closing at US$23.75. Could this big upgrade push the stock even higher?

Following the latest upgrade, the current consensus, from the four analysts covering Orrstown Financial Services, is for revenues of US$95m in 2021, which would reflect a considerable 15% reduction in Orrstown Financial Services' sales over the past 12 months. Statutory earnings per share are anticipated to dip 3.8% to US$2.78 in the same period. Prior to this update, the analysts had been forecasting revenues of US$82m and earnings per share (EPS) of US$2.38 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Orrstown Financial Services

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.2% to US$25.50 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Orrstown Financial Services, with the most bullish analyst valuing it at US$27.00 and the most bearish at US$24.00 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 20% by the end of 2021. This indicates a significant reduction from annual growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.6% per year. It's pretty clear that Orrstown Financial Services' 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 this year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Orrstown Financial Services could be worth investigating further.

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

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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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