Dime Community Bancshares, Inc. (NASDAQ:DCOM) shareholders are probably feeling a little disappointed, since its shares fell 9.3% to US$29.76 in the week after its latest annual results. Revenues came in 2.2% below expectations, at US$413m. Statutory earnings per share were relatively better off, with a per-share profit of US$3.73 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Dime Community Bancshares
Taking into account the latest results, the current consensus from Dime Community Bancshares' five analysts is for revenues of US$436.0m in 2023, which would reflect a reasonable 5.7% increase on its sales over the past 12 months. Statutory earnings per share are forecast to decrease 2.7% to US$3.67 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$451.8m and earnings per share (EPS) of US$4.03 in 2023. 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 6.7% to US$36.40, with the weaker earnings outlook clearly leading valuation estimates. 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 Dime Community Bancshares at US$42.00 per share, while the most bearish prices it at US$34.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Dime Community Bancshares' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 5.7% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.5% annually. Factoring in the forecast slowdown in growth, it looks like Dime Community Bancshares is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Dime Community Bancshares. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Dime Community Bancshares' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Dime Community Bancshares going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Dime Community Bancshares that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.