Earnings Beat: Washington Trust Bancorp, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Washington Trust Bancorp, Inc. (NASDAQ:WASH) just released its second-quarter report and things are looking bullish. The company beat forecasts, with revenue of US$48m, some 2.7% above estimates, and statutory earnings per share (EPS) coming in at US$0.63, 28% ahead of expectations. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Washington Trust Bancorp

Taking into account the latest results, Washington Trust Bancorp's three analysts currently expect revenues in 2024 to be US$189.5m, approximately in line with the last 12 months. Statutory earnings per share are expected to decrease 9.9% to US$2.42 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$191.0m and earnings per share (EPS) of US$2.15 in 2024. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at US$27.50, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Washington Trust Bancorp analyst has a price target of US$29.00 per share, while the most pessimistic values it at US$26.00. This is a very narrow spread of estimates, implying either that Washington Trust Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2024. Historically, Washington Trust Bancorp's top line has shrunk approximately 0.2% annually over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.3% per year. So it's pretty clear that, although revenues are improving, Washington Trust Bancorp is still expected to grow slower than the 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 Washington Trust Bancorp following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Washington Trust Bancorp's revenue is expected to perform worse 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 in mind, we wouldn't be too quick to come to a conclusion on Washington Trust Bancorp. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Washington Trust Bancorp analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Washington Trust Bancorp is showing 1 warning sign in our investment analysis , you should know about...

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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