Amerant Bancorp Inc. Just Missed EPS By 52%: Here's What Analysts Think Will Happen Next
It's been a good week for Amerant Bancorp Inc. (NASDAQ:AMTB) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.9% to US$13.52. Statutory earnings per share disappointed, coming in -52% short of expectations, at US$0.08. Fortunately revenue performance was a lot stronger, with revenues of US$71m arriving 14% ahead of predictions. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Amerant Bancorp
After the latest results, the consensus from Amerant Bancorp's four analysts is for revenues of US$249.3m in 2020, which would reflect a discernible 2.4% decline in sales compared to the last year of performance. Statutory earnings per share are expected to tumble 68% to US$0.32 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$244.0m and earnings per share (EPS) of US$0.54 in 2020. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
The analysts also cut Amerant Bancorp's price target 9.6% to US$17.33, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in sales. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Amerant Bancorp analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$16.00. This is a very narrow spread of estimates, implying either that Amerant Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would also point out that the forecast 2.4% revenue decline is better than the historical trend, which saw revenues shrink -6.5% annually over the past year
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Amerant Bancorp. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Amerant Bancorp's future valuation.
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 forecasts for Amerant Bancorp going out to 2021, 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 2 warning signs for Amerant Bancorp (1 is significant!) that you need to be mindful of.
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