BankUnited, Inc. (NYSE:BKU) shareholders are probably feeling a little disappointed, since its shares fell 7.8% to US$24.84 in the week after its latest quarterly results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$224m, statutory earnings beat expectations by a notable 12%, coming in at US$0.70 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 13 analysts covering BankUnited are now predicting revenues of US$903.8m in 2021. If met, this would reflect a substantial 29% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 26% to US$2.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$921.9m and earnings per share (EPS) of US$2.67 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.
The analysts reconfirmed their price target of US$26.33, showing that the business is executing well and in line with expectations. 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. The most optimistic BankUnited analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$16.00. 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.
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. It's clear from the latest estimates that BankUnited's rate of growth is expected to accelerate meaningfully, with the forecast 29% revenue growth noticeably faster than its historical growth of 0.4%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.3% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that BankUnited is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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 BankUnited analysts - going out to 2022, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for BankUnited that you should be aware of.
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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