Kearny Financial Corp. just beat analyst forecasts, and analysts have updated their models
Last week saw the latest release of quarterly results from Kearny Financial Corp. (NASDAQ: KRNY), an important step in the company’s journey to build a stronger business. The result was positive overall – although revenue of $54 million was in line with analysts’ forecasts, Kearny Financial surprised with a statutory profit of $0.25 per share, slightly better than expected. Analysts typically update their forecasts with each earnings report, and we can judge from their estimates if their view of the business has changed or if there are new concerns to consider. We’ve rounded up the most recent statutory forecasts to see if analysts have changed their earnings models as a result of these results.
See our latest analysis for Kearny Financial
Given the latest results, the most recent consensus for Kearny Financial from two analysts is for revenue of US$218.1 million in 2023, which if achieved would represent an acceptable increase of 2.4% of its sales over the last 12 months. Statutory earnings per share are expected to decline 18% to US$0.83 over the same period. Prior to this earnings report, analysts were forecasting revenue of US$218.1 million and earnings per share (EPS) of US$0.94 in 2023. So there has certainly been a dip in sentiment after the latest results, noting the substantial drop in the new EPS guidance.
The average price target fell 7.9% to US$11.67, with lower earnings expectations clearly tied to a lower valuation estimate.
Another way to view these estimates is in the context of the big picture, such as how the forecast compares to past performance, and whether the forecast is more or less optimistic compared to other companies in the industry. We emphasize that Kearny Financial’s revenue growth is expected to slow, with the projected annualized growth rate of 3.2% through the end of 2023 being well below the historic growth of 13% per year over the past five years. By comparison, the other companies in this sector covered by analysts are expected to increase their turnover by 4.6% per year. Given the expected slower growth, it seems obvious that Kearny Financial is also expected to grow more slowly than other players in the industry.
The most important thing to remember is that analysts have lowered their earnings per share estimates, which shows that there has been a marked drop in sentiment following these results. On the positive side, there were no major changes in revenue estimates; although forecasts imply that revenues will underperform the industry as a whole. The consensus price target fell measurably as analysts seemed unreassured by the latest results, leading to a lower estimate for Kearny Financial’s future valuation.
Continuing this thinking, we believe that the company’s long-term outlook is much more relevant than next year’s results. At least one analyst has provided forecasts through 2024, which can be viewed for free on our platform here.
Additionally, you should also inquire about the 2 warning signs we spotted with Kearny Financial (including 1 that makes us a little uneasy).
Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
Join a Paid User Research Session
You will receive a $30 Amazon Gift Card for 1 hour of your time while helping us create better investment tools for individual investors like you. register here