Barings BDC, Inc. (NYSE:BBDC) Just Reported Annual Earnings: Have Analysts Changed Their Mind On The Stock?

The yearly results for Barings BDC, Inc. (NYSE:BBDC) were released last week, making it a good time to revisit its performance. It looks like the results were a bit of a negative overall. While revenues of US$135m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.5% to hit US$1.19 per share. 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.

View our latest analysis for Barings BDC

After the latest results, the five analysts covering Barings BDC are now predicting revenues of US$168.9m in 2022. If met, this would reflect a major 25% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to plunge 22% to US$0.93 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$159.5m and earnings per share (EPS) of US$0.94 in 2022. There doesn't appear to have been a major change in sentiment following the results, other than the small increase to revenue estimates.

Even though revenue forecasts increased, there was no change to the consensus price target of US$12.21, suggesting the analysts are focused on earnings as the driver of value creation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Barings BDC at US$12.50 per share, while the most bearish prices it at US$11.75. 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. One thing stands out from these estimates, which is that Barings BDC is forecast to grow faster in the future than it has in the past, with revenues expected to display 25% annualised growth until the end of 2022. If achieved, this would be a much better result than the 5.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 1.8% annually. So it looks like Barings BDC is expected to grow faster than its competitors, at least for a while.

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. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$12.21, 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. We have estimates - from multiple Barings BDC analysts - going out to 2023, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Barings BDC (2 shouldn't be ignored!) that we have uncovered.

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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.