Shareholders in Capital City Bank Group, Inc. (NASDAQ:CCBG) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The stock price has risen 5.4% to US$20.01 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
Following the upgrade, the latest consensus from Capital City Bank Group's four analysts is for revenues of US$195m in 2020, which would reflect a notable 15% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to decline 15% to US$1.55 in the same period. Previously, the analysts had been modelling revenues of US$170m and earnings per share (EPS) of US$1.27 in 2020. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
Despite these upgrades, the consensus price target fell 10% to US$21.75, perhaps signalling that the uplift in performance is not expected to last. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Capital City Bank Group at US$26.00 per share, while the most bearish prices it at US$20.00. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Capital City Bank Group's past performance and to peers in the same industry. The analysts are definitely expecting Capital City Bank Group's growth to accelerate, with the forecast 15% growth ranking favourably alongside historical growth of 5.1% 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 2.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Capital City Bank Group 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. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Capital City Bank Group could be one for the watch list.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Capital City Bank Group going out to 2022, and you can see them free on our platform here..
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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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