The latest analyst coverage could presage a bad day for New York Community Bancorp, Inc. (NYSE:NYCB), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the latest consensus from New York Community Bancorp's eight analysts is for revenues of US$2.6b in 2024, which would reflect a major 27% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 71% to US$2.67. However, before this estimates update, the consensus had been expecting revenues of US$2.9b and US$2.10 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

The consensus price target was broadly unchanged at US$12.27, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting New York Community Bancorp's growth to accelerate, with the forecast 60% annualised growth to the end of 2024 ranking favourably alongside historical growth of 21% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that New York Community Bancorp is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on New York Community Bancorp after the downgrade.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for New York Community Bancorp going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.

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