Hilltop Holdings Inc. Just Recorded A 68% EPS Beat: Here's What Analysts Are Forecasting Next

A week ago, Hilltop Holdings Inc. (NYSE:HTH) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. The company beat forecasts, with revenue of US$285m, some 3.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.42, 68% ahead of expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Hilltop Holdings after the latest results.

View our latest analysis for Hilltop Holdings

Taking into account the latest results, Hilltop Holdings' four analysts currently expect revenues in 2024 to be US$1.17b, approximately in line with the last 12 months. Statutory earnings per share are forecast to sink 13% to US$1.49 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.20b and earnings per share (EPS) of US$1.53 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The analysts made no major changes to their price target of US$32.67, suggesting the downgrades are not expected to have a long-term impact on Hilltop Holdings' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Hilltop Holdings at US$33.00 per share, while the most bearish prices it at US$32.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would also point out that the forecast 1.8% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 5.7% 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 5.8% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Hilltop Holdings to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$32.67, 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. We have estimates - from multiple Hilltop Holdings analysts - going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Hilltop Holdings that 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.