Merchants Bancorp Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Merchants Bancorp (NASDAQ:MBIN) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 4.2% to hit US$171m. Merchants Bancorp reported statutory earnings per share (EPS) US$0.97, which was a notable 19% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Taking into account the latest results, the most recent consensus for Merchants Bancorp from three analysts is for revenues of US$714.8m in 2026. If met, it would imply a decent 20% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 14% to US$4.97. Before this earnings report, the analysts had been forecasting revenues of US$711.6m and earnings per share (EPS) of US$5.13 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

See our latest analysis for Merchants Bancorp

It might be a surprise to learn that the consensus price target was broadly unchanged at US$40.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Merchants Bancorp at US$42.00 per share, while the most bearish prices it at US$38.00. This is a very narrow spread of estimates, implying either that Merchants Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. It's clear from the latest estimates that Merchants Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 13% 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. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Merchants Bancorp to grow faster 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$40.00, 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. At Simply Wall St, we have a full range of analyst estimates for Merchants Bancorp going out to 2027, and you can see them free on our platform here..

You can also view our analysis of Merchants Bancorp's balance sheet, and whether we think Merchants Bancorp is carrying too much debt, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.