As you might know, Simmons First National Corporation (NASDAQ:SFNC) just kicked off its latest quarterly results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of US$225m, some 8.1% above estimates, and statutory earnings per share (EPS) coming in at US$0.60, 49% 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the six analysts covering Simmons First National provided consensus estimates of US$790.9m revenue in 2021, which would reflect a discernible 3.7% decline on its sales over the past 12 months. Statutory earnings per share are forecast to dive 29% to US$1.64 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$823.5m and earnings per share (EPS) of US$1.70 in 2021. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
The consensus price target fell 5.6% to US$19.90, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Simmons First National, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$17.50 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Simmons First National's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 3.7% revenue decline a notable change from historical growth of 19% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.4% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Simmons First National is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Simmons First National's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Simmons First National going out to 2022, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 2 warning signs for Simmons First National (1 shouldn't be ignored!) that you need to be mindful 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.