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Bank of Marin Bancorp (NASDAQ:BMRC) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results look mixed - while revenue fell marginally short of analyst estimates at US$99m, statutory earnings beat expectations 5.7%, with Bank of Marin Bancorp reporting profits of US$2.22 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Bank of Marin Bancorp after the latest results.
Following the latest results, Bank of Marin Bancorp's five analysts are now forecasting revenues of US$103.5m in 2021. This would be a credible 4.0% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to sink 15% to US$1.97 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$103.2m and earnings per share (EPS) of US$1.88 in 2021. So the consensus seems to have become somewhat more optimistic on Bank of Marin Bancorp's earnings potential following these results.
There's been no major changes to the consensus price target of US$40.75, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. Currently, the most bullish analyst values Bank of Marin Bancorp at US$41.00 per share, while the most bearish prices it at US$39.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Bank of Marin Bancorp's revenue growth will slow down substantially, with revenues next year expected to grow 4.0%, compared to a historical growth rate of 7.2% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.3% next year. Factoring in the forecast slowdown in growth, it seems obvious that Bank of Marin Bancorp is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Bank of Marin Bancorp's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Bank of Marin Bancorp's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$40.75, with the latest estimates not enough to have an impact on their price targets.
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 Bank of Marin Bancorp going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Bank of Marin Bancorp (including 1 which doesn't sit too well with us) .
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.
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