Celebrations may be in order for Umpqua Holdings Corporation (NASDAQ:UMPQ) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Umpqua Holdings shares have been sold down a little recently, so investors may be hoping the latest upgrade changes the market's appetite for the business. At US$20.25, the stock is 4.3% below where it was a week ago.
Following the upgrade, the current consensus from Umpqua Holdings' seven analysts is for revenues of US$1.4b in 2022 which - if met - would reflect a decent 9.2% increase on its sales over the past 12 months. Statutory earnings per share are supposed to sink 18% to US$1.59 in the same period. Previously, the analysts had been modelling revenues of US$1.2b and earnings per share (EPS) of US$1.58 in 2022. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.
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. It's clear from the latest estimates that Umpqua Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 9.2% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 2.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Umpqua Holdings to grow faster 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Umpqua Holdings.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Umpqua Holdings going out to 2023, 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.
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.