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Lakeland Financial Corporation Just Beat EPS By 54%: Here's What Analysts Think Will Happen Next

Simply Wall St
·4 mins read

As you might know, Lakeland Financial Corporation (NASDAQ:LKFN) just kicked off its latest quarterly results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$51m, some 3.1% above estimates, and statutory earnings per share (EPS) coming in at US$0.77, 54% 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Lakeland Financial

earnings-and-revenue-growth
earnings-and-revenue-growth

After the latest results, the four analysts covering Lakeland Financial are now predicting revenues of US$210.3m in 2020. If met, this would reflect a notable 12% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to shrink 5.6% to US$2.98 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$212.1m and earnings per share (EPS) of US$2.68 in 2020. Although the revenue estimates have not really changed, we can see there's been a nice gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at US$43.33, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Lakeland Financial, with the most bullish analyst valuing it at US$46.00 and the most bearish at US$39.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. The analysts are definitely expecting Lakeland Financial's growth to accelerate, with the forecast 12% growth ranking favourably alongside historical growth of 8.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.9% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Lakeland Financial is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Lakeland Financial following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$43.33, with the latest estimates not enough to have an impact on their price targets.

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 Lakeland Financial analysts - going out to 2022, and you can see them free on our platform here.

Even so, be aware that Lakeland Financial is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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 editorial-team@simplywallst.com.