Yahoo Finance Results: Sandy Spring Bancorp, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Sandy Spring Bancorp, Inc. (NASDAQ:SASR) just released its latest third-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 5.1% to hit US$127m. Sandy Spring Bancorp also reported a statutory profit of US$0.94, which was an impressive 32% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Sandy Spring Bancorp
After the latest results, the five analysts covering Sandy Spring Bancorp are now predicting revenues of US$466.5m in 2021. If met, this would reflect a huge 43% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 80% to US$3.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$466.1m and earnings per share (EPS) of US$2.93 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$28.50, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Sandy Spring Bancorp at US$30.00 per share, while the most bearish prices it at US$25.00. This is a very narrow spread of estimates, implying either that Sandy Spring Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key 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 Sandy Spring Bancorp's rate of growth is expected to accelerate meaningfully, with the forecast 43% revenue growth noticeably faster than its historical growth of 14%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 1.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sandy Spring Bancorp 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 Sandy Spring Bancorp following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$28.50, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Sandy Spring Bancorp analysts - going out to 2024, 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 Sandy Spring 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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