Investors in M&T Bank Corporation (NYSE:MTB) had a good week, as its shares rose 3.1% to close at US$168 following the release of its annual results. Results look mixed - while revenue fell marginally short of analyst estimates at US$6.0b, statutory earnings were in line with expectations, at US$13.75 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Following last week's earnings report, M&T Bank's eleven analysts are forecasting 2020 revenues to be US$6.10b, approximately in line with the last 12 months. Statutory per share are forecast to be US$13.90, approximately in line with the last 12 months. In the lead-up to this report, analysts had been modelling revenues of US$6.08b and earnings per share (EPS) of US$13.75 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$181. 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. Currently, the most bullish analyst values M&T Bank at US$207 per share, while the most bearish prices it at US$157. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the M&T Bank's past performance and to peers in the same market. We would highlight that M&T Bank's revenue growth is expected to slow, with forecast 1.4% increase next year well below the historical 7.3%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 5.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than M&T Bank.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that M&T Bank's revenues are expected to perform worse than the wider market. 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.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have forecasts for M&T Bank going out to 2022, and you can see them free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.