- Oops!Something went wrong.Please try again later.
1st Constitution Bancorp (NASDAQ:FCCY) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market seems to be pricing in some improvement in the business too, with the stock up 5.1% over the past week, closing at US$12.99. Could this big upgrade push the stock even higher?
Following the upgrade, the most recent consensus for 1st Constitution Bancorp from its three analysts is for revenues of US$72m in 2021 which, if met, would be a solid 17% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to decrease 8.2% to US$1.39 in the same period. Before this latest update, the analysts had been forecasting revenues of US$65m and earnings per share (EPS) of US$1.14 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to US$15.50 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic 1st Constitution Bancorp analyst has a price target of US$16.00 per share, while the most pessimistic values it at US$15.00. This is a very narrow spread of estimates, implying either that 1st Constitution Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that 1st Constitution Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 17% revenue growth noticeably faster than its historical growth of 8.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.3% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect 1st Constitution Bancorp to grow faster 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 next year, expecting improving business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, 1st Constitution Bancorp could be worth investigating further.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for 1st Constitution Bancorp going out to 2022, 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.