Earnings Update: Here's Why Analysts Just Lifted Their Valley National Bancorp (NASDAQ:VLY) Price Target To US$10.30

Valley National Bancorp (NASDAQ:VLY) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results were roughly in line with estimates, with revenues of US$471m and statutory earnings per share of US$0.18. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Valley National Bancorp

Taking into account the latest results, the consensus forecast from Valley National Bancorp's ten analysts is for revenues of US$1.98b in 2025. This reflects a substantial 25% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 51% to US$0.94. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.00b and earnings per share (EPS) of US$0.95 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.4% to US$10.30. It looks as though they previously had some doubts over whether the business would live up to their expectations. 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 Valley National Bancorp analyst has a price target of US$11.00 per share, while the most pessimistic values it at US$9.00. 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. It's clear from the latest estimates that Valley National Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Valley National Bancorp is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Valley National Bancorp going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Valley National Bancorp that you need to take into consideration.

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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.