As you might know, Bank of Marin Bancorp (NASDAQ:BMRC) recently reported its full-year numbers. Bank of Marin Bancorp missed revenue estimates by 6.2%, with sales of US$99m, although statutory earnings per share (EPS) of US$2.22 beat expectations, coming in 5.7% ahead of analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year. NasdaqCM:BMRC Earnings and Revenue Growth January 27th 2021
After the latest results, the five analysts covering Bank of Marin Bancorp are now predicting revenues of US$103.5m in 2021. If met, this would reflect a reasonable 4.0% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to sink 15% to US$1.97 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$103.2m and earnings per share (EPS) of US$1.88 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$40.75, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Bank of Marin Bancorp at US$41.00 per share, while the most bearish prices it at US$39.00. This is a very narrow spread of estimates, implying either that Bank of Marin Bancorp is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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 pretty clear that there is an expectation that Bank of Marin Bancorp's revenue growth will slow down substantially, with revenues next year expected to grow 4.0%, compared to a historical growth rate of 7.2% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Bank of Marin Bancorp.
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 Bank of Marin Bancorp following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse 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 forecasts for Bank of Marin Bancorp 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 Bank of Marin Bancorp (1 is a bit unpleasant) 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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