Investors in TowneBank (NASDAQ:TOWN) had a good week, as its shares rose 3.3% to close at US$32.84 following the release of its quarterly results. TowneBank reported US$192m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.67 beat expectations, being 9.4% 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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After the latest results, the four analysts covering TowneBank are now predicting revenues of US$795.5m in 2025. If met, this would reflect a notable 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 7.8% to US$2.58. Before this earnings report, the analysts had been forecasting revenues of US$805.5m and earnings per share (EPS) of US$2.63 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

See our latest analysis for TowneBank

The consensus price target held steady at US$39.25, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values TowneBank at US$42.00 per share, while the most bearish prices it at US$38.00. This is a very narrow spread of estimates, implying either that TowneBank is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. The analysts are definitely expecting TowneBank's growth to accelerate, with the forecast 15% annualised growth to the end of 2025 ranking favourably alongside historical growth of 3.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect TowneBank to grow faster than the wider industry.

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The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple TowneBank analysts - going out to 2026, and you can see them free on our platform here.

You can also see whether TowneBank is carrying too much debt, and whether its balance sheet is healthy, for free  on our platform here.

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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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