First Republic Bank (NYSE:FRC) came out with its yearly results last week, and we wanted to see how the business is performing and what top analysts think of the company following this report. First Republic Bank missed revenue estimates by 4.2%, with sales of US$3.3b, although statutory earnings per share (EPS) of US$5.20 beat expectations, coming in 2.1% ahead of analyst estimates. 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 thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for First Republic Bank from 13 analysts is for revenues of US$3.80b in 2020, which is a decent 16% increase on its sales over the past 12 months. Statutory per-share earnings are expected to be US$5.33, roughly flat on the last 12 months. Before this earnings report, analysts had been forecasting revenues of US$3.75b and earnings per share (EPS) of US$5.31 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$117. 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. The most optimistic First Republic Bank analyst has a price target of US$135 per share, while the most pessimistic values it at US$80.00. This shows there is still quite a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. Next year brings more of the same, according to analysts, with revenue forecast to grow 16%, in line with its 15% annual 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 4.3% per year. So it's pretty clear that First Republic Bank is forecast to grow substantially faster than its 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. 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.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple First Republic Bank analysts - going out to 2022, and you can see them free on our platform here.
You can also see whether First Republic Bank is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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