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Commerce Bancshares, Inc. (NASDAQ:CBSH) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat both earnings and revenue forecasts, with revenue of US$349m, some 3.7% above estimates, and statutory earnings per share (EPS) coming in at US$1.11, 58% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Commerce Bancshares after the latest results.
Following the latest results, Commerce Bancshares' six analysts are now forecasting revenues of US$1.35b in 2021. This would be a notable 14% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 21% to US$3.42. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.32b and earnings per share (EPS) of US$3.12 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades,the analysts have not made any major changes to their price target of US$59.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. There are some variant perceptions on Commerce Bancshares, with the most bullish analyst valuing it at US$72.00 and the most bearish at US$40.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Commerce Bancshares' rate of growth is expected to accelerate meaningfully, with the forecast 14% revenue growth noticeably faster than its historical growth of 3.7%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.5% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Commerce Bancshares is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Commerce Bancshares' earnings potential next year. 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$59.00, 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. At Simply Wall St, we have a full range of analyst estimates for Commerce Bancshares going out to 2022, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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