The full-year results for Bankwell Financial Group, Inc. (NASDAQ:BWFG) were released last week, making it a good time to revisit its performance. It was a credible result overall, with revenues of US$59m and statutory earnings per share of US$2.31 both in line with analyst estimates, showing that Bankwell Financial Group is executing in line with expectations. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Taking into account the latest results, the latest consensus from Bankwell Financial Group's dual analysts is for revenues of US$61.7m in 2020, which would reflect a reasonable 5.3% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to decrease 4.2% to US$2.25 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$61.0m and earnings per share (EPS) of US$2.37 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$31.25, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Bankwell Financial Group's performance in recent years. It's pretty clear that analysts expect Bankwell Financial Group's revenue growth will slow down substantially, with revenues next year expected to grow 5.3%, compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.1% next year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Bankwell Financial Group to grow at about the same rate as the wider market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Bankwell Financial Group. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. The consensus price target held steady at US$31.25, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2021, which can be seen for free on our platform here.
You can also see whether Bankwell Financial Group is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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