Stock Analysis

Analysts Just Shipped A Notable Upgrade To Their Customers Bancorp, Inc. (NYSE:CUBI) Estimates

  •  Updated
NYSE:CUBI
Source: Shutterstock

Celebrations may be in order for Customers Bancorp, Inc. (NYSE:CUBI) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 6.6% over the past week, closing at US$35.31. Could this big upgrade push the stock even higher?

Following the upgrade, the current consensus from Customers Bancorp's eight analysts is for revenues of US$566m in 2021 which - if met - would reflect a credible 5.5% increase on its sales over the past 12 months. Statutory earnings per share are presumed to expand 20% to US$7.00. Previously, the analysts had been modelling revenues of US$511m and earnings per share (EPS) of US$5.58 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Customers Bancorp

earnings-and-revenue-growth
NYSE:CUBI Earnings and Revenue Growth May 7th 2021

With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to US$42.00 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Customers Bancorp, with the most bullish analyst valuing it at US$52.00 and the most bearish at US$37.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We would highlight that Customers Bancorp's revenue growth is expected to slow, with the forecast 7.4% annualised growth rate until the end of 2021 being well below the historical 9.5% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.6% per year. Even after the forecast slowdown in growth, it seems obvious that Customers Bancorp is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Customers Bancorp could be worth investigating further.

Analysts are definitely bullish on Customers Bancorp, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other warning signs we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

When trading Customers Bancorp or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


What are the risks and opportunities for Customers Bancorp?

Customers Bancorp, Inc. operates as the bank holding company for Customers Bank that provides financial products and services to individual consumers, and small and middle market businesses.

View Full Analysis

Rewards

  • Trading at 64.5% below our estimate of its fair value

Risks

  • Earnings are forecast to decline by an average of 2.4% per year for the next 3 years

View all Risks and Rewards

Share Price

Market Cap

1Y Return

View Company Report