Bankinter, S.A. Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

Simply Wall St

Last week, you might have seen that Bankinter, S.A. (BME:BKT) released its yearly result to the market. The early response was not positive, with shares down 5.4% to €5.94 in the past week. It was a credible result overall, with revenues of €2.1b and statutory earnings per share of €0.60 both in line with analyst estimates, showing that Bankinter is executing in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.

View our latest analysis for Bankinter

BME:BKT Past and Future Earnings, January 26th 2020

Following the latest results, Bankinter's 14 analysts are now forecasting revenues of €2.10b in 2020. This would be a satisfactory 2.2% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to dip 7.3% to €0.57 in the same period. Before this earnings report, analysts had been forecasting revenues of €2.10b and earnings per share (EPS) of €0.59 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at €6.73, with 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 Bankinter at €10.20 per share, while the most bearish prices it at €5.55. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

In addition, we can look to Bankinter's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We would highlight that Bankinter's revenue growth is expected to slow, with forecast 2.2% increase next year well below the historical 11%p.a. growth over the last five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 2.1% per year. Factoring in the forecast slowdown in growth, it looks like analysts are expecting Bankinter to grow at about the same rate as the wider market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. 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.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Bankinter analysts - going out to 2022, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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