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F.N.B. Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

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·4 min read
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Shareholders might have noticed that F.N.B. Corporation (NYSE:FNB) filed its quarterly result this time last week. The early response was not positive, with shares down 4.4% to US$7.20 in the past week. It looks like a pretty bad result, all things considered. Although revenues of US$301m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 37% to hit US$0.14 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for F.N.B

NYSE:FNB Past and Future Earnings April 27th 2020
NYSE:FNB Past and Future Earnings April 27th 2020

After the latest results, the nine analysts covering F.N.B are now predicting revenues of US$1.24b in 2020. If met, this would reflect a notable 8.5% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to dive 23% to US$0.79 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.19b and earnings per share (EPS) of US$0.92 in 2020. So it's pretty clear the analysts have mixed opinions on F.N.B after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.

The consensus price target fell 5.7% to US$9.22, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic F.N.B analyst has a price target of US$11.00 per share, while the most pessimistic values it at US$8.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await F.N.B shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that F.N.B's revenue growth is expected to slow, with forecast 8.5% increase next year well below the historical 16%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.9% next year. So it's pretty clear that, while F.N.B's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for F.N.B. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 F.N.B analysts - going out to 2021, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for F.N.B that you should be aware of.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.