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Farmers National Banc Corp. Just Beat EPS By 43%: Here's What Analysts Think Will Happen Next

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Simply Wall St
·4 min read
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It's been a good week for Farmers National Banc Corp. (NASDAQ:FMNB) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.9% to US$12.05. It looks like a credible result overall - although revenues of US$30m were what the analysts expected, Farmers National Banc surprised by delivering a (statutory) profit of US$0.30 per share, an impressive 43% above what was forecast. 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. 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 Farmers National Banc

NasdaqCM:FMNB Past and Future Earnings May 3rd 2020
NasdaqCM:FMNB Past and Future Earnings May 3rd 2020

Following the latest results, Farmers National Banc's four analysts are now forecasting revenues of US$122.7m in 2020. This would be a decent 10% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to fall 18% to US$1.06 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$121.4m and earnings per share (EPS) of US$1.04 in 2020. 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.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$13.75. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Farmers National Banc, with the most bullish analyst valuing it at US$15.00 and the most bearish at US$12.00 per share. This is a very narrow spread of estimates, implying either that Farmers National Banc is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Farmers National Banc's revenue growth is expected to slow, with forecast 10% increase next year well below the historical 13%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.8% next year. Even after the forecast slowdown in growth, it seems obvious that Farmers National Banc is also expected 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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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.

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 Farmers National Banc going out to 2021, and you can see them free on our platform here..

Even so, be aware that Farmers National Banc is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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.