Territorial Bancorp Inc. Just Beat Revenue Estimates By 7.6%
Territorial Bancorp Inc. (NASDAQ:TBNK) just released its latest full-year results and things are looking bullish. The company beat expectations with revenues of US$66m arriving 7.6% ahead of forecasts. Statutory earnings per share (EPS) were US$2.34, 2.2% ahead of estimates. 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. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
View our latest analysis for Territorial Bancorp
Taking into account the latest results, the three analysts covering Territorial Bancorp provided consensus estimates of US$62.2m revenue in 2020, which would reflect a discernible 6.2% decline on its sales over the past 12 months. Statutory earnings per share are forecast to fall 20% to US$1.92 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$62.7m and earnings per share (EPS) of US$1.96 in 2020. Analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share forecasts for next year.
The consensus price target held steady at US$31.33, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Territorial Bancorp, with the most bullish analyst valuing it at US$32.00 and the most bearish at US$31.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast revenue decline of 6.2% a significant reduction from annual growth of 2.2% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 3.7% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Territorial Bancorp to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. 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 in mind, we wouldn't be too quick to come to a conclusion on Territorial Bancorp. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Territorial Bancorp going out to 2021, and you can see them free on our platform here..
It might also be worth considering whether Territorial Bancorp's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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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