Investors in Bridge Bancorp, Inc. (NASDAQ:BDGE) had a good week, as its shares rose 5.6% to close at US$20.13 following the release of its first-quarter results. It was not a great result overall. While revenues of US$42m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 17% to hit US$0.47 per share. The 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the five analysts covering Bridge Bancorp are now predicting revenues of US$193.1m in 2020. If met, this would reflect a notable 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to climb 19% to US$2.88. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$173.1m and earnings per share (EPS) of US$2.34 in 2020. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.
Despite these upgrades,the analysts have not made any major changes to their price target of US$24.80, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Bridge Bancorp analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$23.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Bridge Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 18% revenue growth noticeably faster than its historical growth of 11%p.a. 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 2.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Bridge Bancorp to grow faster than the wider 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 Bridge Bancorp following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at US$24.80, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Bridge Bancorp. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Bridge Bancorp 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 Bridge Bancorp (1 is potentially serious!) that you need to be mindful of.
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