Yahoo Finance Mercantile Bank Corporation Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Mercantile Bank Corporation (NASDAQ:MBWM) investors will be delighted, with the company turning in some strong numbers with its latest results. Mercantile Bank beat earnings, with revenues hitting US$58m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 17%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Mercantile Bank after the latest results.
Check out our latest analysis for Mercantile Bank
Following the latest results, Mercantile Bank's four analysts are now forecasting revenues of US$226.3m in 2024. This would be an okay 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 7.1% to US$4.77 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$225.0m and earnings per share (EPS) of US$4.61 in 2024. So the consensus seems to have become somewhat more optimistic on Mercantile Bank's earnings potential following these results.
The consensus price target was unchanged at US$41.67, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Mercantile Bank, with the most bullish analyst valuing it at US$47.00 and the most bearish at US$37.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Mercantile Bank's revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2024 being well below the historical 9.7% 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 5.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Mercantile Bank.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Mercantile Bank's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Mercantile Bank's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$41.67, 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 Mercantile Bank going out to 2025, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Mercantile Bank you should know about.
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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.
