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First Financial Bankshares, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year

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Simply Wall St
·4 min read
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First Financial Bankshares, Inc. (NASDAQ:FFIN) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of US$131m arriving 4.4% ahead of forecasts. Statutory earnings per share (EPS) were US$0.37, 8.2% ahead of estimates. 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 First Financial Bankshares after the latest results.

See our latest analysis for First Financial Bankshares

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Taking into account the latest results, the consensus forecast from First Financial Bankshares' five analysts is for revenues of US$477.7m in 2021, which would reflect a solid 9.1% improvement in sales compared to the last 12 months. Statutory per-share earnings are expected to be US$1.30, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$475.2m and earnings per share (EPS) of US$1.24 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 13% to US$29.20, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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 First Financial Bankshares analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$25.00. This is a very narrow spread of estimates, implying either that First Financial Bankshares is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of First Financial Bankshares'historical trends, as next year's 9.1% revenue growth is roughly in line with 9.0% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 1.4% per year. So it's pretty clear that First Financial Bankshares is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards First Financial Bankshares following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on First Financial Bankshares. Long-term earnings power is much more important than next year's profits. We have forecasts for First Financial Bankshares going out to 2022, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for First Financial Bankshares (1 doesn't sit too well with us) you should be aware 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.