Stock Futures – Earnings Beat: Sandy Spring Bancorp, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

As you might know, Sandy Spring Bancorp, Inc. (NASDAQ:SASR) recently reported its annual numbers. Revenues missed analyst forecasts badly, coming in 28% below estimates at US$327m. Equally surprising was the fact that statutory earnings per share of US$2.18 beat analyst estimates by 18%. 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. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Sandy Spring Bancorp

Following the latest results, Sandy Spring Bancorp’s five analysts are now forecasting revenues of US$474.4m in 2021. This would be a major 45% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 111% to US$3.54. In the lead-up to this report, the analysts had been modelling revenues of US$474.4m and earnings per share (EPS) of US$3.34 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There’s been no major changes to the consensus price target of US$37.25, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock’s valuation. 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. Currently, the most bullish analyst values Sandy Spring Bancorp at US$38.00 per share, while the most bearish prices it at US$34.00. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sandy Spring Bancorp’s past performance and to peers in the same industry. The analysts are definitely expecting Sandy Spring Bancorp’s growth to accelerate, with the forecast 45% growth ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.5% next 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sandy Spring Bancorp’s earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations – and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$37.25, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn’t be too quick to come to a conclusion on Sandy Spring Bancorp. Long-term earnings power is much more important than next year’s profits. We have forecasts for Sandy Spring Bancorp going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we’ve spotted 4 warning signs for Sandy Spring Bancorp you should be aware of.

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