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Western New England Bancorp, Inc. (NASDAQ:WNEB) just released its full-year report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$66m, some 6.7% above estimates, and statutory earnings per share (EPS) coming in at US$0.45, 32% ahead of expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Western New England Bancorp after the latest results.
Taking into account the latest results, the current consensus from Western New England Bancorp's three analysts is for revenues of US$67.3m in 2021, which would reflect an okay 2.4% increase on its sales over the past 12 months. Per-share earnings are expected to swell 15% to US$0.51. Before this earnings report, the analysts had been forecasting revenues of US$64.3m and earnings per share (EPS) of US$0.41 in 2021. So it seems there's been a definite increase in optimism about Western New England Bancorp's future following the latest results, with a considerable lift to the earnings per share forecasts in particular.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.7% to US$8.33per share. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Western New England Bancorp analyst has a price target of US$9.00 per share, while the most pessimistic values it at US$7.00. This is a very narrow spread of estimates, implying either that Western New England Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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 Western New England Bancorp's revenue growth will slow down substantially, with revenues next year expected to grow 2.4%, compared to a historical growth rate of 10% over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 2.9% next year. Factoring in the forecast slowdown in growth, it's pretty clear that Western New England Bancorp is still expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Western New England Bancorp's earnings potential next year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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 Western New England Bancorp analysts - going out to 2022, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Western New England Bancorp that 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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