Hilltop Holdings Inc. (NYSE:HTH) just released its latest quarterly results and things are looking bullish. The company beat forecasts, with revenue of US$285m, some 3.9% above estimates, and statutory earnings per share (EPS) coming in at US$0.42, 68% 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.
Following last week's earnings report, Hilltop Holdings' four analysts are forecasting 2024 revenues to be US$1.17b, approximately in line with the last 12 months. Statutory earnings per share are expected to descend 13% to US$1.49 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.20b and earnings per share (EPS) of US$1.53 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the US$32.67 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Hilltop Holdings analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$32.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Hilltop Holdings is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 5.7% 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 see their revenue grow 5.8% per year. So while a broad number of companies are forecast to grow, unfortunately Hilltop Holdings is expected to see its revenue affected worse than other companies in the 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 they will perform worse than the wider industry. The consensus price target held steady at US$32.67, 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 Hilltop Holdings going out to 2025, and you can see them free on our platform here.
Even so, be aware that Hilltop Holdings is showing 2 warning signs in our investment analysis , you should know about...
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