Yahoo Finance Regions Financial Corporation Just Missed Earnings - But Analysts Have Updated Their Models
Last week, you might have seen that Regions Financial Corporation (NYSE:RF) released its quarterly result to the market. The early response was not positive, with shares down 3.1% to US$18.36 in the past week. It looks like the results were a bit of a negative overall. While revenues of US$2.0b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.3% to hit US$0.62 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Regions Financial
After the latest results, the 15 analysts covering Regions Financial are now predicting revenues of US$7.71b in 2023. If met, this would reflect a notable 8.3% improvement in sales compared to the last 12 months. Statutory per share are forecast to be US$2.40, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.78b and earnings per share (EPS) of US$2.45 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at US$22.20, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Regions Financial at US$25.05 per share, while the most bearish prices it at US$19.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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 Regions Financial's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 6.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Regions Financial is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Regions Financial. 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$22.20, 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 Regions Financial going out to 2025, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Regions Financial (including 1 which is significant) .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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