Yahoo Finance Preferred Bank (NASDAQ:PFBC) Released Earnings Last Week And Analysts Lifted Their Price Target To US$87.75
Preferred Bank (NASDAQ:PFBC) just released its latest quarterly results and things are looking bullish. The company beat expectations with revenues of US$72m arriving 3.1% ahead of forecasts. Statutory earnings per share (EPS) were US$2.44, 2.4% ahead of estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Preferred Bank
Taking into account the latest results, Preferred Bank's five analysts currently expect revenues in 2024 to be US$283.5m, approximately in line with the last 12 months. Statutory earnings per share are expected to decline 11% to US$9.69 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$274.6m and earnings per share (EPS) of US$9.39 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.4% to US$87.75per share. 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 Preferred Bank at US$91.00 per share, while the most bearish prices it at US$84.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Preferred Bank is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Preferred Bank's past performance and to peers in the same industry. We would highlight that Preferred Bank's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.0% annually. Factoring in the forecast slowdown in growth, it seems obvious that Preferred Bank 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 Preferred Bank following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Preferred Bank. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Preferred Bank going out to 2025, and you can see them free on our platform here..
Even so, be aware that Preferred Bank is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...
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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.
