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Park National Corporation (NYSEMKT:PRK) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were US$441m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$7.80 were also better than expected, beating analyst predictions by 13%. 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.
Following last week's earnings report, Park National's three analysts are forecasting 2021 revenues to be US$443.9m, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 15% to US$6.66 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$445.5m and earnings per share (EPS) of US$6.51 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$102, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Park National analyst has a price target of US$116 per share, while the most pessimistic values it at US$78.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. We would highlight that Park National's revenue growth is expected to slow, with forecast 0.6% increase next year well below the historical 6.9%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Park National 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 Park National's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Park National going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Park National .
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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