Flushing Financial Corporation (NASDAQ:FFIC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 16% to US$11.66 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
After this upgrade, Flushing Financial's three analysts are now forecasting revenues of US$211m in 2020. This would be a huge 25% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to decline 20% to US$1.13 in the same period. Prior to this update, the analysts had been forecasting revenues of US$189m and earnings per share (EPS) of US$0.56 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 analysts have not made any major changes to their price target of US$15.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Flushing Financial at US$16.00 per share, while the most bearish prices it at US$14.00. This is a very narrow spread of estimates, implying either that Flushing Financial is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. One thing stands out from these estimates, which is that Flushing Financial is forecast to grow faster in the future than it has in the past, with revenues expected to grow 25%. If achieved, this would be a much better result than the 1.5% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.1% per year. So it looks like Flushing Financial is expected to grow faster than its competitors, at least for a while.
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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Flushing Financial.
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 Flushing Financial analysts - going out to 2024, 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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