Atlantic Union Bankshares Corporation (NASDAQ:AUB) just released its second-quarter report and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 12% higher than the analysts had forecast, at US$176m, while EPS were US$0.39 beating analyst models by 63%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Atlantic Union Bankshares after the latest results.
Taking into account the latest results, the most recent consensus for Atlantic Union Bankshares from four analysts is for revenues of US$708.7m in 2020 which, if met, would be a substantial 22% increase on its sales over the past 12 months. Statutory earnings per share are expected to tumble 22% to US$1.43 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$654.8m and earnings per share (EPS) of US$1.47 in 2020. So it's pretty clear consensus is mixed on Atlantic Union Bankshares after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.
There's been no major changes to the price target of US$30.67, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. 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 Atlantic Union Bankshares, with the most bullish analyst valuing it at US$40.00 and the most bearish at US$27.00 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Atlantic Union Bankshares' rate of growth is expected to accelerate meaningfully, with the forecast 22% revenue growth noticeably faster than its historical growth of 18%p.a. 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 Atlantic Union Bankshares is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Atlantic Union Bankshares. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Atlantic Union Bankshares analysts - going out to 2022, and you can see them free on our platform here.
You can also see whether Atlantic Union Bankshares is carrying too much debt, and whether its balance sheet is healthy, for free 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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