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Analyst Estimates: Here's What Brokers Think Of Valley National Bancorp (NASDAQ:VLY) After Its Full-Year Report

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·3 min read
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Last week, you might have seen that Valley National Bancorp (NASDAQ:VLY) released its yearly result to the market. The early response was not positive, with shares down 3.7% to US$13.68 in the past week. Revenues came in 2.4% below expectations, at US$1.3b. Statutory earnings per share were relatively better off, with a per-share profit of US$1.12 being roughly in line with analyst 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Valley National Bancorp

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for Valley National Bancorp from seven analysts is for revenues of US$1.57b in 2022 which, if met, would be a meaningful 19% increase on its sales over the past 12 months. Statutory earnings per share are expected to shrink 3.7% to US$1.05 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.66b and earnings per share (EPS) of US$1.01 in 2022. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The consensus has made no major changes to the price target of US$15.67, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Valley National Bancorp, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$14.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Valley National Bancorp 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 Valley National Bancorp's past performance and to peers in the same industry. The analysts are definitely expecting Valley National Bancorp's growth to accelerate, with the forecast 19% annualised growth to the end of 2022 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Valley National Bancorp is expected to grow much faster than its industry.

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 Valley National Bancorp following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at US$15.67, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Valley National Bancorp analysts - going out to 2023, 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 Valley National Bancorp that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.