BancFirst Corporation (NASDAQ:BANF) just released its quarterly report and things are looking bullish. The company beat expectations with revenues of US$151m arriving 2.3% ahead of forecasts. Statutory earnings per share (EPS) were US$1.50, 7.7% ahead of estimates. 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.
NasdaqGS:BANF Earnings and Revenue Growth April 22nd 2024
Taking into account the latest results, the consensus forecast from BancFirst's four analysts is for revenues of US$607.2m in 2024. This reflects a modest 2.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to reduce 7.1% to US$5.79 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$594.5m and earnings per share (EPS) of US$5.46 in 2024. 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.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$91.63, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values BancFirst at US$100.00 per share, while the most bearish prices it at US$84.50. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that BancFirst's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2024 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than BancFirst.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around BancFirst's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at US$91.63, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple BancFirst analysts - going out to 2025, 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 BancFirst (1 shouldn't be ignored!) that you need to be mindful of.
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