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

By
Simply Wall St
Published
October 30, 2020
NYSE:BKU

Shareholders might have noticed that BankUnited, Inc. (NYSE:BKU) filed its third-quarter result this time last week. The early response was not positive, with shares down 7.8% to US$24.84 in the past week. Revenues disappointed slightly, as sales of US$224m were 2.3% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of US$0.70 coming in 12% above what was anticipated. 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. 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 BankUnited

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NYSE:BKU Earnings and Revenue Growth October 30th 2020

Taking into account the latest results, the most recent consensus for BankUnited from 13 analysts is for revenues of US$903.8m in 2021 which, if met, would be a sizeable 29% increase on its sales over the past 12 months. Per-share earnings are expected to leap 26% to US$2.62. In the lead-up to this report, the analysts had been modelling revenues of US$921.9m and earnings per share (EPS) of US$2.67 in 2021. 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.

There were no changes to revenue or earnings estimates or the price target of US$26.33, suggesting that the company has met expectations in its recent result. 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. There are some variant perceptions on BankUnited, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$16.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that BankUnited's rate of growth is expected to accelerate meaningfully, with the forecast 29% revenue growth noticeably faster than its historical growth of 0.4%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 1.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that BankUnited 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$26.33, with the latest estimates not enough to have an impact on their price targets.

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 BankUnited going out to 2022, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for BankUnited you should know about.

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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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