Last week, you might have seen that CVB Financial Corp. (NASDAQ:CVBF) released its annual result to the market. The early response was not positive, with shares down 3.0% to US$21.11 in the past week. CVB Financial reported in line with analyst predictions, delivering revenues of US$484m and statutory earnings per share of US$1.48, suggesting the business is executing well and in line with its plan. Following the result, 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. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
After the latest results, the consensus from CVB Financial's seven analysts is for revenues of US$473.1m in 2020, which would reflect a measurable 2.3% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to reduce 6.3% to US$1.39 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$475.2m and earnings per share (EPS) of US$1.40 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$22.17, suggesting that the company has met expectations in its recent result. 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 CVB Financial at US$24.00 per share, while the most bearish prices it at US$20.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the CVB Financial's past performance and to peers in the same market. These estimates imply that sales are expected to slow, with a forecast revenue decline of 2.3% a significant reduction from annual growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 4.9% next year. It's pretty clear that CVB Financial's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that CVB Financial's revenues are expected to perform worse than the wider market. 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 in mind, we wouldn't be too quick to come to a conclusion on CVB Financial. Long-term earnings power is much more important than next year's profits. We have forecasts for CVB Financial going out to 2021, and you can see them free on our platform here.
You can also view our analysis of CVB Financial's balance sheet, and whether we think CVB Financial is carrying too much debt, for free on our platform here.
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