SVB Financial Group (NASDAQ:SIVB) just released its quarterly report and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 20% higher than the analysts had forecast, at US$1.1b, while EPS were US$8.47 beating analyst models by 59%. 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.
Following the latest results, SVB Financial Group's 14 analysts are now forecasting revenues of US$3.47b in 2021. This would be an okay 3.2% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to dive 21% to US$16.37 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.26b and earnings per share (EPS) of US$15.30 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
It will come as no surprise to learn that the analysts have increased their price target for SVB Financial Group 10% to US$299on the back of these upgrades. 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. There are some variant perceptions on SVB Financial Group, with the most bullish analyst valuing it at US$360 and the most bearish at US$210 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await SVB Financial Group shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SVB Financial Group's past performance and to peers in the same industry. We would highlight that SVB Financial Group's revenue growth is expected to slow, with forecast 3.2% increase next year well below the historical 21%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.4% next year. Even after the forecast slowdown in growth, it seems obvious that SVB Financial Group is also expected to grow faster 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 SVB Financial Group following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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 forecasts for SVB Financial Group 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 3 warning signs for SVB Financial Group (1 makes us a bit uncomfortable) 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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