Shareholders of Lakeland Financial Corporation (NASDAQ:LKFN) will be pleased this week, given that the stock price is up 14% to US$72.28 following its latest annual results. Lakeland Financial reported US$241m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$3.65 beat expectations, being 7.8% 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Lakeland Financial
Taking into account the latest results, Lakeland Financial’s three analysts currently expect revenues in 2024 to be US$241.2m, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 6.0% to US$3.47 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$240.0m and earnings per share (EPS) of US$3.39 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 10% to US$65.50, suggesting that higher earnings estimates flow through to the stock’s valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Lakeland Financial analyst has a price target of US$78.00 per share, while the most pessimistic values it at US$51.00. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. We would highlight that Lakeland Financial’s revenue growth is expected to slow, with the forecast 0.08% annualised growth rate until the end of 2024 being well below the historical 5.7% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Lakeland Financial is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Lakeland Financial following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn’t be too quick to come to a conclusion on Lakeland Financial. Long-term earnings power is much more important than next year’s profits. We have forecasts for Lakeland Financial 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 1 warning sign for Lakeland Financial 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.