Investors in Stock Yards Bancorp, Inc. (NASDAQ:SYBT) had a good week, as its shares rose 7.4% to close at US$46.18 following the release of its first-quarter results. Stock Yards Bancorp reported US$83m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.88 beat expectations, being 8.4% higher than what the analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Stock Yards Bancorp's five analysts are now forecasting revenues of US$342.1m in 2024. This would be a satisfactory 5.5% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be US$3.53, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$339.1m and earnings per share (EPS) of US$3.37 in 2024. So the consensus seems to have become somewhat more optimistic on Stock Yards Bancorp's earnings potential following these results.
The consensus price target was unchanged at US$54.20, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Stock Yards Bancorp at US$60.00 per share, while the most bearish prices it at US$50.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Stock Yards Bancorp is an easy business to forecast or the the analysts are all using similar assumptions.
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 pretty clear that there is an expectation that Stock Yards Bancorp's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.4% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Compare this to the 692 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.0% per year. So it's pretty clear that, while Stock Yards Bancorp's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Stock Yards Bancorp following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$54.20, 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 forecasts for Stock Yards Bancorp going out to 2025, and you can see them free on our platform here.
It might also be worth considering whether Stock Yards Bancorp's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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.