Results: United Bankshares, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

By
Simply Wall St
Published
October 26, 2020
NasdaqGS:UBSI

United Bankshares, Inc. (NASDAQ:UBSI) just released its third-quarter report and things are looking bullish. Statutory earnings performance was extremely strong, with revenue of US$321m beating expectations by 28% and earnings per share (EPS) of US$0.80, an impressive 57%ahead of expectations. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for United Bankshares

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NasdaqGS:UBSI Earnings and Revenue Growth October 26th 2020

Taking into account the latest results, the consensus forecast from United Bankshares' five analysts is for revenues of US$938.8m in 2021, which would reflect a notable 12% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to fall 10% to US$2.06 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$931.2m and earnings per share (EPS) of US$1.99 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$30.50, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic United Bankshares analyst has a price target of US$34.00 per share, while the most pessimistic values it at US$29.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 12%, in line with its 12% annual growth over the past five years. Compare this with the wider industry, which analyst estimates (in aggregate) suggest will see revenues grow 1.4% next year. So it's pretty clear that United Bankshares is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards United Bankshares following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$30.50, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for United Bankshares going out to 2022, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for United Bankshares that you should be aware of.

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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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