It's been a good week for Popular, Inc. (NASDAQ:BPOP) shareholders, because the company has just released its latest quarterly results, and the shares gained 7.1% to US$64.84. Popular reported US$694m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.90 beat expectations, being 2.7% higher than what the analysts expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Popular
NasdaqGS:BPOP Earnings and Revenue Growth October 29th 2023
Taking into account the latest results, the most recent consensus for Popular from six analysts is for revenues of US$2.92b in 2024. If met, it would imply a meaningful 12% increase on its revenue over the past 12 months. Statutory earnings per share are expected to descend 18% to US$7.95 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.91b and earnings per share (EPS) of US$7.98 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$75.86, suggesting that the company has met expectations in its recent result. 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 Popular at US$89.00 per share, while the most bearish prices it at US$63.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Popular shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Popular'shistorical trends, as the 9.2% annualised revenue growth to the end of 2024 is roughly in line with the 8.4% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.3% per year. So although Popular is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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$75.86, 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 Popular. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Popular analysts - going out to 2025, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 3 warning signs for Popular (1 doesn't sit too well with us!) that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
