A week ago, UMB Financial Corporation (NASDAQ:UMBF) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The company beat both earnings and revenue forecasts, with revenue of US$297m, some 2.4% above estimates, and statutory earnings per share (EPS) coming in at US$1.52, 50% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on UMB Financial after the latest results.
After the latest results, the five analysts covering UMB Financial are now predicting revenues of US$1.15b in 2021. If met, this would reflect a meaningful 14% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to reduce 3.7% to US$3.69 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.15b and earnings per share (EPS) of US$3.69 in 2021. 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.
The consensus price target rose 8.4% to US$64.50despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of UMB Financial's earnings by assigning a price premium. 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. The most optimistic UMB Financial analyst has a price target of US$68.00 per share, while the most pessimistic values it at US$48.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting UMB Financial's growth to accelerate, with the forecast 14% growth ranking favourably alongside historical growth of 4.7% per annum 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 1.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect UMB Financial to grow faster 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for UMB Financial going out to 2022, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 1 warning sign for UMB Financial that you need to be mindful of.
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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