Industry Analysts Just Made A Notable Upgrade To Their Salisbury Bancorp, Inc. (NASDAQ:SAL) Revenue Forecasts

Celebrations may be in order for Salisbury Bancorp, Inc. (NASDAQ:SAL) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this 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 8.4% to US$46.50 over the past 7 days. Could this big upgrade push the stock even higher?

Following the upgrade, the latest consensus from Salisbury Bancorp's twin analysts is for revenues of US$45m in 2021, which would reflect a modest 5.4% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to grow 14% to US$4.78. Before this latest update, the analysts had been forecasting revenues of US$40m and earnings per share (EPS) of US$4.74 in 2021. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

See our latest analysis for Salisbury Bancorp

The consensus price target increased 9.1% to US$45.00, with an improved revenue forecast carrying the promise of a more valuable business, in time. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Salisbury Bancorp, with the most bullish analyst valuing it at US$42.00 and the most bearish at US$40.50 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Salisbury Bancorp's past performance and to peers in the same industry. The analysts are definitely expecting Salisbury Bancorp's growth to accelerate, with the forecast 5.4% annualised growth to the end of 2021 ranking favourably alongside historical growth of 3.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 7.5% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Salisbury Bancorp is expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Salisbury Bancorp.

Better yet, our automated discounted cash flow calculation (DCF) suggests Salisbury Bancorp could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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