Celebrations may be in order for Orrstown Financial Services, Inc. (NASDAQ:ORRF) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 8.8% to US$26.11 over the past 7 days. Could this big upgrade push the stock even higher?
Following the upgrade, the current consensus from Orrstown Financial Services' three analysts is for revenues of US$125m in 2022 which - if met - would reflect a meaningful 8.7% increase on its sales over the past 12 months. Per-share earnings are expected to rise 7.8% to US$3.15. Prior to this update, the analysts had been forecasting revenues of US$89m and earnings per share (EPS) of US$2.71 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
It will come as no surprise to learn that the analysts have increased their price target for Orrstown Financial Services 5.5% to US$29.00 on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Orrstown Financial Services, with the most bullish analyst valuing it at US$30.00 and the most bearish at US$28.00 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Orrstown Financial Services' growth to accelerate, with the forecast 18% annualised growth to the end of 2022 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Orrstown Financial Services is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Orrstown Financial Services could be worth investigating further.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Orrstown Financial Services analysts - going out to 2023, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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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.
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