Valley National Bancorp (NASDAQ:VLY) shareholders are probably feeling a little disappointed, since its shares fell 5.1% to US$7.32 in the week after its latest first-quarter results. It looks like the results were a bit of a negative overall. While revenues of US$455m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.8% to hit US$0.18 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Valley National Bancorp after the latest results.
Taking into account the latest results, the consensus forecast from Valley National Bancorp's twelve analysts is for revenues of US$1.90b in 2024. This reflects a decent 8.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.0% to US$0.88. In the lead-up to this report, the analysts had been modelling revenues of US$1.92b and earnings per share (EPS) of US$0.97 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
The consensus price target held steady at US$9.67, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Valley National Bancorp at US$12.50 per share, while the most bearish prices it at US$8.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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 Valley National Bancorp's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 15% 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) 5.7% per year. So it's pretty clear that, while Valley National Bancorp's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Valley National Bancorp. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$9.67, 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. At Simply Wall St, we have a full range of analyst estimates for Valley National Bancorp going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Valley National Bancorp has 2 warning signs we think 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.