MidWestOne Financial Group, Inc. (NASDAQ:MOFG) Analysts Just Trimmed Their Revenue Forecasts By 10%
Today is shaping up negative for MidWestOne Financial Group, Inc. (NASDAQ:MOFG) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Shares are up 7.8% to US$21.13 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
After the downgrade, the consensus from MidWestOne Financial Group's four analysts is for revenues of US$162m in 2024, which would reflect a small 7.0% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to grow 16% to US$2.51. Before this latest update, the analysts had been forecasting revenues of US$181m and earnings per share (EPS) of US$2.71 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.
View our latest analysis for MidWestOne Financial Group
Analysts made no major changes to their price target of US$24.25, suggesting the downgrades are not expected to have a long-term impact on MidWestOne Financial Group's valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MidWestOne Financial Group's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 5.7% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 9.9% 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 4.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - MidWestOne Financial Group is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on MidWestOne Financial Group after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for MidWestOne Financial Group going out to 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
