It’s been a good week for Premier Financial Corp. (NASDAQ:PFC) shareholders, because the company has just released its latest third-quarter results, and the shares gained 5.1% to US$18.97. It looks like a credible result overall – although revenues of US$77m were in line with what the analysts predicted, Premier Financial surprised by delivering a statutory profit of US$0.69 per share, a notable 17% above expectations. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the four analysts covering Premier Financial are now predicting revenues of US$291.7m in 2021. If met, this would reflect a sizeable 43% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 57% to US$2.23. Before this earnings report, the analysts had been forecasting revenues of US$286.2m and earnings per share (EPS) of US$2.24 in 2021. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$21.88. 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. The most optimistic Premier Financial analyst has a price target of US$26.00 per share, while the most pessimistic values it at US$18.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It’s clear from the latest estimates that Premier Financial’s rate of growth is expected to accelerate meaningfully, with the forecast 43% revenue growth noticeably faster than its historical growth of 11%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 7.0% per year. So it’s clear with the acceleration in growth, Premier Financial is expected to grow meaningfully faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, they made no changes to their revenue estimates – and they expect sales to perform better than the wider industry. The consensus price target held steady at US$21.88, with the latest estimates not enough to have an impact on their price targets.
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 Premier Financial going out to 2022, and you can see them free on our platform here..
Before you take the next step you should know about the 4 warning signs for Premier Financial (1 is significant!) that we have uncovered.
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.