Results: Park National Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Park National Corporation (NYSEMKT:PRK) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were US$441m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$7.80 were also better than expected, beating analyst predictions by 13%. 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. 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 Park National

Taking into account the latest results, Park National's three analysts currently expect revenues in 2021 to be US$443.9m, approximately in line with the last 12 months. Statutory earnings per share are forecast to descend 15% to US$6.66 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$445.5m and earnings per share (EPS) of US$6.51 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$102, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. There are some variant perceptions on Park National, with the most bullish analyst valuing it at US$116 and the most bearish at US$78.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Park National's revenue growth is expected to slow, with forecast 0.6% increase next year well below the historical 6.9%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Park National is also expected to grow slower than other industry participants.

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 Park National following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Park National's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$102, 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 Park National analysts - going out to 2022, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Park National that we have uncovered.

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