Sandy Spring Bancorp, Inc. Just Beat EPS By 18%: Here's What Analysts Think Will Happen Next

Investors in Sandy Spring Bancorp, Inc. (NASDAQ:SASR) had a good week, as its shares rose 5.5% to close at US$30.92 following the release of its second-quarter results. It looks like a credible result overall - although revenues of US$101m were in line with what the analysts predicted, Sandy Spring Bancorp surprised by delivering a statutory profit of US$0.51 per share, a notable 18% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Sandy Spring Bancorp

Taking into account the latest results, the consensus forecast from Sandy Spring Bancorp's four analysts is for revenues of US$406.9m in 2024. This reflects a modest 2.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 4.8% to US$1.90 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$407.1m and earnings per share (EPS) of US$1.89 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 18% to US$29.25. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Sandy Spring Bancorp analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$25.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 5.6% growth on an annualised basis. That is in line with its 6.4% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 6.3% per year. So although Sandy Spring Bancorp is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 forecasts for Sandy Spring Bancorp going out to 2025, and you can see them free on our platform here.

You can also view our analysis of Sandy Spring Bancorp's balance sheet, and whether we think Sandy Spring Bancorp is carrying too much debt, for 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.

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