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The second-quarter results for First Interstate BancSystem, Inc. (NASDAQ:FIBK) were released last week, making it a good time to revisit its performance. Revenues disappointed slightly, as sales of US$162m were 2.5% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of US$0.58 coming in 18% above what was anticipated. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from First Interstate BancSystem's six analysts is for revenues of US$665.7m in 2020, which would reflect a notable 10% increase on its sales over the past 12 months. Statutory earnings per share are expected to dip 5.8% to US$2.45 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$676.0m and earnings per share (EPS) of US$2.28 in 2020. So the consensus seems to have become somewhat more optimistic on First Interstate BancSystem's earnings potential following these results.
There's been no major changes to the consensus price target of US$35.71, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 First Interstate BancSystem analyst has a price target of US$41.00 per share, while the most pessimistic values it at US$31.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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 pretty clear that there is an expectation that First Interstate BancSystem's revenue growth will slow down substantially, with revenues next year expected to grow 10%, compared to a historical growth rate of 13% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.9% next year. So it's pretty clear that, while First Interstate BancSystem's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
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 First Interstate BancSystem following these results. Happily, there were no major changes to revenue forecasts, with the business still expected 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for First Interstate BancSystem going out to 2022, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for First Interstate BancSystem (1 is concerning) you should be aware of.
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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