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Shareholders of Lakeland Bancorp, Inc. (NASDAQ:LBAI) will be pleased this week, given that the stock price is up 11% to US$11.77 following its latest quarterly results. The result was positive overall - although revenues of US$59m were in line with what the analysts predicted, Lakeland Bancorp surprised by delivering a statutory profit of US$0.28 per share, modestly greater than expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Lakeland Bancorp's seven analysts is for revenues of US$235.7m in 2021, which would reflect a solid 16% increase on its sales over the past 12 months. Statutory earnings per share are forecast to dip 5.8% to US$1.14 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$237.7m and earnings per share (EPS) of US$1.11 in 2021. So the consensus seems to have become somewhat more optimistic on Lakeland Bancorp's earnings potential following these results.
The consensus price target was unchanged at US$13.93, 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. Currently, the most bullish analyst values Lakeland Bancorp at US$14.50 per share, while the most bearish prices it at US$13.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. The analysts are definitely expecting Lakeland Bancorp's growth to accelerate, with the forecast 16% growth ranking favourably alongside historical growth of 9.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.4% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Lakeland Bancorp is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Lakeland Bancorp's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still 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.
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. We have estimates - from multiple Lakeland Bancorp analysts - going out to 2022, and you can see them free on our platform here.
It might also be worth considering whether Lakeland Bancorp's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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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