Results: Hilltop Holdings Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Hilltop Holdings Inc. (NYSE:HTH) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat forecasts, with revenue of US$298m, some 5.1% above estimates, and statutory earnings per share (EPS) coming in at US$0.31, 20% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See 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 decline 20% to US$1.41 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.17b and earnings per share (EPS) of US$1.36 in 2024. So the consensus seems to have become somewhat more optimistic on Hilltop Holdings' earnings potential following these results.

The consensus price target was unchanged at US$32.67, 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 Hilltop Holdings analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$32.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 7.5% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 6.4% annually. 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 here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Hilltop Holdings 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 Hilltop Holdings' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$32.67, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Hilltop Holdings going out to 2025, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Hilltop Holdings (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

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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