Earnings Update: Here's Why Analysts Just Lifted Their S&T Bancorp, Inc. (NASDAQ:STBA) Price Target To US$32.50
Investors in S&T Bancorp, Inc. (NASDAQ:STBA) had a good week, as its shares rose 6.4% to close at US$34.92 following the release of its full-year results. Results look mixed - while revenue fell marginally short of analyst estimates at US$389m, statutory earnings beat expectations 2.7%, with S&T Bancorp reporting profits of US$3.74 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for S&T Bancorp
Taking into account the latest results, S&T Bancorp's four analysts currently expect revenues in 2024 to be US$391.5m, approximately in line with the last 12 months. Statutory earnings per share are expected to fall 17% to US$3.13 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$391.0m and earnings per share (EPS) of US$3.11 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 7.4% to US$32.50despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of S&T Bancorp's earnings by assigning a price premium. 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. The most optimistic S&T Bancorp analyst has a price target of US$35.00 per share, while the most pessimistic values it at US$29.00. This is a very narrow spread of estimates, implying either that S&T Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. It's pretty clear that there is an expectation that S&T Bancorp's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.6% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.6% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than S&T Bancorp.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that S&T Bancorp's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for S&T Bancorp going out to 2025, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for S&T Bancorp that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
