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Wintrust Financial Corporation (NASDAQ:WTFC) missed earnings with its latest yearly results, disappointing overly-optimistic analysts. Wintrust Financial missed analyst estimates, with revenues of US$1.4b and statutory earnings per share (EPS) of US$6.03, missing by 4.2% and 2.2% respectively. 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. 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 Wintrust Financial's eleven analysts is for revenues of US$1.52b in 2020, which would reflect a solid 8.2% increase on its sales over the past 12 months. Statutory earnings per share are expected to shrink 3.8% to US$5.88 in the same period. Before this earnings report, analysts had been forecasting revenues of US$1.52b and earnings per share (EPS) of US$6.15 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share forecasts for next year.
The consensus price target held steady at US$73.42, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Wintrust Financial at US$84.00 per share, while the most bearish prices it at US$66.00. 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 Wintrust Financial forecasts compare to the wider market's forecast performance. It's pretty clear that analysts expect Wintrust Financial's revenue growth will slow down substantially, with revenues next year expected to grow 8.2%, compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.9% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkWintrust Financial will grow faster than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment 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. The consensus price target held steady at US$73.42, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on Wintrust Financial. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Wintrust Financial going out to 2021, and you can see them free on our platform here..
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