It's been a good week for Associated Banc-Corp (NYSE:ASB) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.5% to US$14.30. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$258m, statutory earnings beat expectations by a notable 19%, coming in at US$0.26 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the consensus from Associated Banc-Corp's nine analysts is for revenues of US$1.08b in 2021, which would reflect an uncomfortable 14% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to nosedive 44% to US$1.07 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.07b and earnings per share (EPS) of US$1.07 in 2021. 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.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$15.78. 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. There are some variant perceptions on Associated Banc-Corp, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$14.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Associated Banc-Corp is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Associated Banc-Corp's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 14% revenue decline a notable change from historical growth of 6.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Associated Banc-Corp is expected to lag 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, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Associated Banc-Corp's revenues are expected to perform worse 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 Associated Banc-Corp analysts - going out to 2022, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Associated Banc-Corp (1 is significant!) that we have uncovered.
This article by Simply Wall St is general in nature. 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.
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