CVB Financial Corp. Just Missed EPS By 12%: Here's What Analysts Think Will Happen Next
Last week saw the newest quarterly earnings release from CVB Financial Corp. (NASDAQ:CVBF), an important milestone in the company's journey to build a stronger business. Revenues were in line with forecasts, at US$114m, although statutory earnings per share came in 12% below what the analysts expected, at US$0.27 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for CVB Financial
Taking into account the latest results, CVB Financial's five analysts currently expect revenues in 2020 to be US$461.1m, approximately in line with the last 12 months. Statutory earnings per share are expected to fall 16% to US$1.16 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$446.9m and earnings per share (EPS) of US$1.18 in 2020. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.
It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$19.60, implying that the uplift in sales is not expected to greatly contribute to CVB Financial's valuation in the near term. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on CVB Financial, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$18.00 per share. This is a very narrow spread of estimates, implying either that CVB Financial is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.1%, a significant reduction from annual growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.9% annually for the foreseeable future. It's pretty clear that CVB Financial's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 CVB Financial analysts - going out to 2021, and you can see them free on our platform here.
You still need to take note of risks, for example - CVB Financial has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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