It's been a good week for The First of Long Island Corporation (NASDAQ:FLIC) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.4% to US$15.08. Revenues of US$28m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.38, missing estimates by 4.0%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from First of Long Island's five analysts is for revenues of US$113.2m in 2020, which would reflect an okay 4.7% increase on its sales over the past 12 months. Statutory earnings per share are forecast to decrease 8.8% to US$1.50 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$113.1m and earnings per share (EPS) of US$1.68 in 2020. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.
The average price target fell 19% to US$18.25, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. Currently, the most bullish analyst values First of Long Island at US$20.50 per share, while the most bearish prices it at US$16.00. This is a very narrow spread of estimates, implying either that First of Long Island is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that First of Long Island's revenue growth is expected to slow, with forecast 4.7% increase next year well below the historical 8.1%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.8% next year. So it's pretty clear that, while First of Long Island's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for First of Long Island. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for First of Long Island 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 First of Long Island (1 is potentially serious!) that you need to be mindful of.
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