Northwest Bancshares, Inc. (NASDAQ:NWBI) just released its quarterly report and things are looking bullish. Northwest Bancshares delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$150m and statutory EPS reaching US$0.30, both beating estimates by more than 10%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the six analysts covering Northwest Bancshares are now predicting revenues of US$538.8m in 2021. If met, this would reflect a substantial 31% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to bounce 52% to US$0.86. Before this earnings report, the analysts had been forecasting revenues of US$523.2m and earnings per share (EPS) of US$0.83 in 2021. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$10.60, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Northwest Bancshares analyst has a price target of US$12.50 per share, while the most pessimistic values it at US$9.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Northwest Bancshares' past performance and to peers in the same industry. The analysts are definitely expecting Northwest Bancshares' growth to accelerate, with the forecast 31% growth ranking favourably alongside historical growth of 4.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 6.9% next year. It seems obvious that as part of the brighter growth outlook, Northwest Bancshares is 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 Northwest Bancshares' earnings potential next year. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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. We have estimates - from multiple Northwest Bancshares analysts - going out to 2022, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Northwest Bancshares 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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