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A week ago, Hilltop Holdings Inc. (NYSE:HTH) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Statutory revenue and earnings both blasted past expectations, with revenue of US$605m beating expectations by 24% and earnings per share (EPS) reaching US$1.70, some 74% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Hilltop Holdings after the latest results.
Following the recent earnings report, the consensus from five analysts covering Hilltop Holdings is for revenues of US$1.56b in 2021, implying an uneasy 19% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to nosedive 48% to US$2.01 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.56b and earnings per share (EPS) of US$2.01 in 2021. 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$25.80. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Hilltop Holdings analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$23.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast revenue decline of 19%, a significant reduction from annual growth of 1.6% 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 1.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Hilltop Holdings is expected to lag the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Hilltop Holdings' revenues are expected to perform worse than the wider industry. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Hilltop Holdings analysts - going out to 2022, and you can see them free on our platform here.
You still need to take note of risks, for example - Hilltop Holdings has 3 warning signs (and 1 which is significant) we think you should know about.
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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