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Peapack-Gladstone Financial Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

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Simply Wall St
·4 min read
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There's been a notable change in appetite for Peapack-Gladstone Financial Corporation (NASDAQ:PGC) shares in the week since its first-quarter report, with the stock down 12% to US$14.86. It looks like a pretty bad result, all things considered. Although revenues of US$46m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 87% to hit US$0.07 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Peapack-Gladstone Financial

NasdaqGS:PGC Past and Future Earnings May 14th 2020
NasdaqGS:PGC Past and Future Earnings May 14th 2020

Taking into account the latest results, the consensus forecast from Peapack-Gladstone Financial's five analysts is for revenues of US$192.8m in 2020, which would reflect a major 24% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to crater 25% to US$1.46 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$183.3m and earnings per share (EPS) of US$2.09 in 2020. While next year's revenue estimates increased, there was also a pretty serious reduction to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The consensus price target was unchanged at US$22.40, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Peapack-Gladstone Financial analyst has a price target of US$24.00 per share, while the most pessimistic values it at US$21.00. This is a very narrow spread of estimates, implying either that Peapack-Gladstone Financial is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Peapack-Gladstone Financial's rate of growth is expected to accelerate meaningfully, with the forecast 24% revenue growth noticeably faster than its historical growth of 13%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Peapack-Gladstone Financial is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Peapack-Gladstone Financial. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster 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. At Simply Wall St, we have a full range of analyst estimates for Peapack-Gladstone Financial going out to 2024, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Peapack-Gladstone Financial that you need to be mindful of.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.