As you might know, National Bankshares, Inc. (NASDAQ:NKSH) recently reported its annual numbers. The result was positive overall – although revenues of US$51m were in line with what the analyst predicted, National Bankshares surprised by delivering a statutory profit of US$3.28 per share, modestly greater than expected. This is an important time for investors, as they can track a company’s performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we’ve gathered the latest statutory forecasts to see what the analyst is expecting for next year.
Taking into account the latest results, National Bankshares’ sole analyst currently expect revenues in 2022 to be US$50.5m, approximately in line with the last 12 months. Statutory earnings per share are expected to descend 11% to US$2.99 in the same period. In the lead-up to this report, the analyst had been modelling revenues of US$49.6m and earnings per share (EPS) of US$2.83 in 2022. The analyst seem to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target rose 14% to US$41.00, suggesting that higher earnings estimates flow through to the stock’s valuation as well.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 0.4% by the end of 2022. This indicates a significant reduction from annual growth of 1.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – National Bankshares is expected to lag 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 National Bankshares’ earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.
It is also worth noting that we have found 1 warning sign for National Bankshares that you need to take into consideration.
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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.