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Last week saw the newest annual earnings release from First Interstate BancSystem, Inc. (NASDAQ:FIBK), an important milestone in the company's journey to build a stronger business. Results look mixed - while revenue fell marginally short of analyst estimates at US$631m, statutory earnings were in line with expectations, at US$2.83 per share. 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've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from First Interstate BancSystem's six analysts is for revenues of US$664.5m in 2020, which would reflect a credible 5.3% increase on its sales over the past 12 months. Statutory earnings per share are expected to accumulate 5.6% to US$3.00. Before this earnings report, analysts had been forecasting revenues of US$668.5m and earnings per share (EPS) of US$3.06 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
Analysts reconfirmed their price target of US$45.00, showing that the business is executing well and in line with expectations. 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 Interstate BancSystem analyst has a price target of US$47.00 per share, while the most pessimistic values it at US$42.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Further, we can compare these estimates to past performance, and see how First Interstate BancSystem forecasts compare to the wider market's forecast performance. We would highlight that First Interstate BancSystem's revenue growth is expected to slow, with forecast 5.3% increase next year well below the historical 13%p.a. growth over the last five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting First Interstate BancSystem to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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. At Simply Wall St, we have a full range of analyst estimates for First Interstate BancSystem going out to 2021, and you can see them free on our platform here..
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