Park National Corporation (NYSEMKT:PRK) just released its latest quarterly results and things are looking bullish. Park National delivered a significant beat to revenue and earnings per share (EPS) expectations, with sales hitting US$122m and statutory EPS reaching US$1.88, 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.
Taking into account the latest results, the most recent consensus for Park National from three analysts is for revenues of US$443.9m in 2021 which, if met, would be a decent 11% increase on its sales over the past 12 months. Statutory earnings per share are forecast to decrease 6.0% to US$6.15 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$423.1m and earnings per share (EPS) of US$5.81 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Despite these upgrades,the analysts have not made any major changes to their price target of US$88.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Park National at US$97.00 per share, while the most bearish prices it at US$75.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Park National is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Park National's past performance and to peers in the same industry. The analysts are definitely expecting Park National's growth to accelerate, with the forecast 11% growth ranking favourably alongside historical growth of 6.1% per annum 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 1.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Park National 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 Park National following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Park National going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Park National (including 1 which shouldn't be ignored) .
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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