Horizon Bancorp, Inc. (NASDAQ:HBNC) shares fell 6.1% to US$16.92 in the week since its latest yearly results. Horizon Bancorp reported in line with analyst predictions, delivering revenues of US$201m and statutory earnings per share of US$1.53, suggesting the business is executing well and in line with its plan. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Horizon Bancorp after the latest results.
After the latest results, the four analysts covering Horizon Bancorp are now predicting revenues of US$215.9m in 2020. If met, this would reflect a modest 7.3% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to accumulate 4.1% to US$1.59. Before this earnings report, analysts had been forecasting revenues of US$215.9m and earnings per share (EPS) of US$1.60 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.
Analysts reconfirmed their price target of US$21.00, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Horizon Bancorp analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$20.00. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that analysts expect Horizon Bancorp's revenue growth will slow down substantially, with revenues next year expected to grow 7.3%, compared to a historical growth rate of 16% 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) 5.0% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkHorizon Bancorp will grow faster than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. 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$21.00, 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 Horizon Bancorp. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Horizon Bancorp analysts - going out to 2021, and you can see them free on our platform here.
You can also view our analysis of Horizon Bancorp's balance sheet, and whether we think Horizon Bancorp is carrying too much debt, for free on our platform here.
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