New Forecasts: Here's What Analysts Think The Future Holds For Orrstown Financial Services, Inc. (NASDAQ:ORRF)
Orrstown Financial Services, Inc. (NASDAQ:ORRF) 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. Investor sentiment seems to be improving too, with the share price up 7.9% to US$23.64 over the past 7 days. Could this big upgrade push the stock even higher?
Following the upgrade, the consensus from three analysts covering Orrstown Financial Services is for revenues of US$118m in 2023, implying a discernible 7.9% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 50% to US$3.36. Prior to this update, the analysts had been forecasting revenues of US$104m and earnings per share (EPS) of US$3.12 in 2023. Sentiment certainly seems to have improved in recent times, with a nice increase in revenue and a slight bump in earnings per share estimates.
Check out our latest analysis for Orrstown Financial Services
Despite these upgrades, the analysts have not made any major changes to their price target of US$24.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Orrstown Financial Services at US$27.00 per share, while the most bearish prices it at US$20.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Orrstown Financial Services is an easy business to forecast or the underlying assumptions are obvious.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with a forecast 15% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.4% per year. It's pretty clear that Orrstown Financial Services' revenues are expected to perform substantially worse than 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. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected 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 Orrstown Financial Services.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Orrstown Financial Services analysts - going out to 2024, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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