Things Look Grim For Provident Financial Services, Inc. (NYSE:PFS) After Today's Downgrade
One thing we could say about the analysts on Provident Financial Services, Inc. (NYSE:PFS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
After the downgrade, the three analysts covering Provident Financial Services are now predicting revenues of US$653m in 2024. If met, this would reflect a substantial 45% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to tumble 60% to US$0.67 in the same period. Previously, the analysts had been modelling revenues of US$741m and earnings per share (EPS) of US$1.01 in 2024. Indeed, we can see that the analysts are a lot more bearish about Provident Financial Services' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Provident Financial Services
It'll come as no surprise then, to learn that the analysts have cut their price target 8.2% to US$17.80.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Provident Financial Services' past performance and to peers in the same industry. It's clear from the latest estimates that Provident Financial Services' rate of growth is expected to accelerate meaningfully, with the forecast 45% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.1% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Provident Financial Services is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Provident Financial Services.
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 Provident Financial Services analysts - going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
