Yahoo Finance Investors Bancorp, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Investors Bancorp, Inc. (NASDAQ:ISBC) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.8% to hit US$202m. Investors Bancorp also reported a statutory profit of US$0.27, which was an impressive 31% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Investors Bancorp
After the latest results, the six analysts covering Investors Bancorp are now predicting revenues of US$813.3m in 2021. If met, this would reflect a notable 17% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 9.9% to US$0.89. Before this earnings report, the analysts had been forecasting revenues of US$808.2m and earnings per share (EPS) of US$0.86 in 2021. So the consensus seems to have become somewhat more optimistic on Investors Bancorp's earnings potential following these results.
There's been no major changes to the consensus price target of US$11.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Investors Bancorp at US$11.50 per share, while the most bearish prices it at US$10.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Investors Bancorp is an easy business to forecast or the the analysts are all using similar assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Investors Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 17% revenue growth noticeably faster than its historical growth of 2.4%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 Investors Bancorp is expected to grow much faster than its 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 Investors Bancorp following these results. 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. The consensus price target held steady at US$11.00, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Investors Bancorp. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Investors Bancorp 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 2 warning signs for Investors Bancorp 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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