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Shareholders might have noticed that Amalgamated Bank (NASDAQ:AMAL) filed its full-year result this time last week. The early response was not positive, with shares down 2.5% to US$14.66 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at US$195m, statutory earnings beat expectations 9.9%, with Amalgamated Bank reporting profits of US$1.48 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the four analysts covering Amalgamated Bank are now predicting revenues of US$202.5m in 2021. If met, this would reflect a modest 4.0% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to reduce 5.4% to US$1.34 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$202.5m and earnings per share (EPS) of US$1.34 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$17.50. 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. The most optimistic Amalgamated Bank analyst has a price target of US$18.00 per share, while the most pessimistic values it at US$17.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Amalgamated Bank's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Amalgamated Bank's revenue growth will slow down substantially, with revenues next year expected to grow 4.0%, compared to a historical growth rate of 11% over the past three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.5% next year. Factoring in the forecast slowdown in growth, it seems obvious that Amalgamated Bank is also expected to grow slower than other industry participants.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Amalgamated Bank's revenues are expected to perform worse than the wider industry. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Amalgamated 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 Amalgamated Bank going out to 2022, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 1 warning sign for Amalgamated Bank that you need to be mindful of.
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. 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.
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