Prosperity Bancshares, Inc. (NYSE:PB) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

It's been a good week for Prosperity Bancshares, Inc. (NYSE:PB) shareholders, because the company has just released its latest first-quarter results, and the shares gained 7.4% to US$64.13. Prosperity Bancshares reported in line with analyst predictions, delivering revenues of US$278m and statutory earnings per share of US$1.18, suggesting the business is executing well and in line with its plan. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Prosperity Bancshares

Taking into account the latest results, the consensus forecast from Prosperity Bancshares' 14 analysts is for revenues of US$1.18b in 2024. This reflects a notable 8.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 18% to US$4.99. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.17b and earnings per share (EPS) of US$4.97 in 2024. 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.

The analysts reconfirmed their price target of US$72.40, showing that the business is executing well and in line with expectations. 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. There are some variant perceptions on Prosperity Bancshares, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$66.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 Prosperity Bancshares' rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 6.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Prosperity Bancshares is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Prosperity Bancshares analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Prosperity Bancshares 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.