Peoples Bancorp Inc. (NASDAQ:PEBO) just released its latest third-quarter results and things are looking bullish. The company beat expectations with revenues of US$52m arriving 2.0% ahead of forecasts. Statutory earnings per share (EPS) were US$0.51, 8.2% ahead of estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Peoples Bancorp from six analysts is for revenues of US$200.7m in 2021 which, if met, would be a notable 19% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 44% to US$2.07. Before this earnings report, the analysts had been forecasting revenues of US$198.7m and earnings per share (EPS) of US$1.87 in 2021. Although the revenue estimates have not really changed, we can see there's been a nice gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The consensus price target was unchanged at US$25.90, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. There are some variant perceptions on Peoples Bancorp, with the most bullish analyst valuing it at US$29.00 and the most bearish at US$21.50 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. It's clear from the latest estimates that Peoples Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 19% revenue growth noticeably faster than its historical growth of 7.4%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.5% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Peoples Bancorp to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Peoples Bancorp following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$25.90, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Peoples Bancorp going out to 2022, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Peoples Bancorp 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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