Yahoo Finance The Bank of N.T. Butterfield & Son Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
The Bank of N.T. Butterfield & Son Limited (NYSE:NTB) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Bank of N.T. Butterfield & Son beat earnings, with revenues hitting US$142m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 16%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Bank of N.T. Butterfield & Son
Taking into account the latest results, Bank of N.T. Butterfield & Son's five analysts currently expect revenues in 2024 to be US$564.6m, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 4.7% to US$4.47 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$558.5m and earnings per share (EPS) of US$4.23 in 2024. So the consensus seems to have become somewhat more optimistic on Bank of N.T. Butterfield & Son's earnings potential following these results.
The consensus price target was unchanged at US$36.80, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. The most optimistic Bank of N.T. Butterfield & Son analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$35.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.3% by the end of 2024. This indicates a significant reduction from annual growth of 2.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.0% per year. It's pretty clear that Bank of N.T. Butterfield & Son's revenues are expected to perform substantially worse than the wider 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 Bank of N.T. Butterfield & Son following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bank of N.T. Butterfield & Son's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$36.80, 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. At Simply Wall St, we have a full range of analyst estimates for Bank of N.T. Butterfield & Son going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 2 warning signs for Bank of N.T. Butterfield & Son (1 is concerning!) that 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.
