Valley National Bancorp Just Missed EPS By 34%: Here's What Analysts Think Will Happen Next

Investors in Valley National Bancorp (NASDAQ:VLY) had a good week, as its shares rose 2.6% to close at US$8.23 following the release of its quarterly results. Statutory earnings per share fell badly short of expectations, coming in at US$0.13, some 34% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$453m. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 Valley National Bancorp

After the latest results, the ten analysts covering Valley National Bancorp are now predicting revenues of US$1.86b in 2024. If met, this would reflect a decent 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 3.2% to US$0.69 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.88b and earnings per share (EPS) of US$0.83 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

The consensus price target held steady at US$8.35, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Valley National Bancorp at US$10.00 per share, while the most bearish prices it at US$7.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Valley National Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 14% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.4% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Valley National Bancorp to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Valley National Bancorp. 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 no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Valley National Bancorp analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Valley National Bancorp , and understanding them should be part of your investment process.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com