Today is shaping up negative for Provident Financial Services, Inc. (NYSE:PFS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the downgrade, the most recent consensus for Provident Financial Services from its four analysts is for revenues of US$729m in 2023 which, if met, would be a major 47% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to decline 12% to US$2.08 in the same period. Prior to this update, the analysts had been forecasting revenues of US$814m and earnings per share (EPS) of US$2.09 in 2023. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a measurable cut to revenues and some minor tweaks to earnings numbers.
Check out our latest analysis for Provident Financial Services
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Provident Financial Services' past performance and to peers in the same industry. It's clear from the latest estimates that Provident Financial Services' rate of growth is expected to accelerate meaningfully, with the forecast 47% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 9.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Provident Financial Services to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Provident Financial Services after today.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Provident Financial Services analysts - going out to 2024, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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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