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Bryn Mawr Bank Corporation (NASDAQ:BMTC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
After the upgrade, the consensus from Bryn Mawr Bank's five analysts is for revenues of US$157m in 2021, which would reflect a definite 14% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to surge 68% to US$2.75. Prior to this update, the analysts had been forecasting revenues of US$141m and earnings per share (EPS) of US$2.58 in 2021. Sentiment certainly seems to have improved in recent times, with a nice increase in revenue and a small lift in earnings per share estimates.
Despite these upgrades, the analysts have not made any major changes to their price target of US$37.35, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Bryn Mawr Bank analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$31.75. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Bryn Mawr Bank is an easy business to forecast or the underlying assumptions are obvious.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bryn Mawr Bank's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 14%, a significant reduction from annual growth of 6.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Bryn Mawr Bank is expected to lag the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Bryn Mawr Bank.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Bryn Mawr Bank going out to 2022, and you can see them free on our platform here..
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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.
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