It's been a good week for Prosperity Bancshares, Inc. (NYSE:PB) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.6% to US$63.55. Results were roughly in line with estimates, with revenues of US$278m and statutory earnings per share of US$1.18. 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.
Taking into account the latest results, the consensus forecast from Prosperity Bancshares' 15 analysts is for revenues of US$1.18b in 2024. This reflects a notable 8.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 18% to US$4.99. Before this earnings report, the analysts had been forecasting revenues of US$1.17b and earnings per share (EPS) of US$4.97 in 2024. 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.
The analysts reconfirmed their price target of US$72.53, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Prosperity Bancshares at US$80.00 per share, while the most bearish prices it at US$66.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Prosperity Bancshares' growth to accelerate, with the forecast 12% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.9% 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 grow their revenue at 6.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Prosperity Bancshares to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 estimates - from multiple Prosperity Bancshares analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Prosperity Bancshares you should know about.
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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.