First Commonwealth Financial Corporation (NYSE:FCF) Released Earnings Last Week And Analysts Lifted Their Price Target To US$17.75

It's been a pretty great week for First Commonwealth Financial Corporation (NYSE:FCF) shareholders, with its shares surging 12% to US$18.60 in the week since its latest second-quarter results. First Commonwealth Financial reported US$120m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.36 beat expectations, being 2.4% higher than what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for First Commonwealth Financial

Taking into account the latest results, the current consensus from First Commonwealth Financial's seven analysts is for revenues of US$475.3m in 2024. This would reflect a modest 2.7% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to dip 8.1% to US$1.43 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$470.7m and earnings per share (EPS) of US$1.40 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 12% to US$17.75, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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 First Commonwealth Financial, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$15.50 per share. This shows there is still a bit of 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that First Commonwealth Financial's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.6% growth on an annualised basis. This is compared to a historical growth rate of 8.6% over the past five years. Compare this to the 683 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.3% per year. So it's pretty clear that, while First Commonwealth Financial's revenue growth is expected to slow, it's expected to grow roughly in line with 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 First Commonwealth Financial following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for First Commonwealth Financial going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - First Commonwealth Financial has 1 warning sign we think you should be aware of.

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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