As you might know, Banner Corporation (NASDAQ:BANR) just kicked off its latest second-quarter results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$147m, some 3.8% above estimates, and statutory earnings per share (EPS) coming in at US$0.67, 97% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Banner's six analysts is for revenues of US$588.0m in 2020, which would reflect a solid 16% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to fall 14% to US$2.77 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$584.5m and earnings per share (EPS) of US$2.45 in 2020. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target was unchanged at US$42.83, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic Banner analyst has a price target of US$52.00 per share, while the most pessimistic values it at US$40.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Banner 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 Banner's past performance and to peers in the same industry. The analysts are definitely expecting Banner's growth to accelerate, with the forecast 16% growth ranking favourably alongside historical growth of 11% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Banner to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Banner's earnings potential next year. 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. The consensus price target held steady at US$42.83, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Banner analysts - going out to 2022, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Banner you should be aware of, and 1 of them doesn't sit too well with us.
This article by Simply Wall St is general in nature. 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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