It's been a good week for CVB Financial Corp. (NASDAQ:CVBF) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.5% to US$18.50. CVB Financial reported US$117m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.35 beat expectations, being 5.0% higher than what the analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, CVB Financial's seven analysts are forecasting 2021 revenues to be US$441.8m, approximately in line with the last 12 months. Statutory earnings per share are expected to decrease 5.4% to US$1.23 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$444.6m and earnings per share (EPS) of US$1.20 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$19.75. 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 CVB Financial at US$22.00 per share, while the most bearish prices it at US$17.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 0.3%, a significant reduction from annual growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CVB Financial is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that CVB Financial's revenues are expected to 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for CVB Financial going out to 2022, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for CVB Financial you should know about.
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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