Signature Bank Just Released Its Annual Results And Analysts Are Updating Their Estimates
It's been a mediocre week for Signature Bank (NASDAQ:SBNY) shareholders, with the stock dropping 16% to US$87.89 in the week since its latest annual results. Signature Bank reported in line with analyst predictions, delivering revenues of US$1.3b and statutory earnings per share of US$10.87, suggesting the business is executing well and in line with its plan. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Signature Bank
Taking into account the latest results, the current consensus from Signature Bank's 15 analysts is for revenues of US$1.44b in 2020, which would reflect a notable 9.6% increase on its sales over the past 12 months. Statutory earnings per share are expected to increase 4.2% to US$11.37. Before this earnings report, analysts had been forecasting revenues of US$1.45b and earnings per share (EPS) of US$11.43 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$154. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Signature Bank, with the most bullish analyst valuing it at US$175 and the most bearish at US$112 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Signature Bank shareholders.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We can infer from the latest estimates that analysts are expecting a continuation of Signature Bank's historical trends, as next year's forecast 9.6% revenue growth is roughly in line with 8.3% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.4% per year. So it's pretty clear that Signature Bank is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Signature Bank's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$154, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Signature Bank analysts - going out to 2022, and you can see them free on our platform here.
You can also see whether Signature Bank is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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.
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