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Last week saw the newest yearly earnings release from First Financial Bankshares, Inc. (NASDAQ:FFIN), an important milestone in the company's journey to build a stronger business. It was a credible result overall, with revenues of US$395m and statutory earnings per share of US$1.21 both in line with analyst estimates, showing that First Financial Bankshares is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the current consensus from First Financial Bankshares's five analysts is for revenues of US$444.6m in 2020, which would reflect a decent 13% increase on its sales over the past 12 months. Statutory earnings per share are expected to accumulate 4.5% to US$1.27. Before this earnings report, analysts had been forecasting revenues of US$437.0m and earnings per share (EPS) of US$1.22 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$31.20, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on First Financial Bankshares, with the most bullish analyst valuing it at US$37.00 and the most bearish at US$26.00 per share. 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.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the First Financial Bankshares's past performance and to peers in the same market. It's clear from the latest estimates that First Financial Bankshares's rate of growth is expected to accelerate meaningfully, with forecast 13% revenue growth noticeably faster than its historical growth of 8.7%p.a. 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 4.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect First Financial Bankshares to grow faster than the wider market.
The Bottom Line
The most important thing to take away from this is that 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 analysts still expecting the business to grow faster than the wider market. 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.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple First Financial Bankshares analysts - going out to 2021, and you can see them free on our platform here.
You can also view our analysis of First Financial Bankshares's balance sheet, and whether we think First Financial Bankshares is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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