The Bank of N.T. Butterfield & Son Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

The Bank of N.T. Butterfield & Son Limited (NYSE:NTB) just released its latest first-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 4.8% to hit US$148m. Bank of N.T. Butterfield & Son reported statutory earnings per share (EPS) US$1.23, which was a notable 12% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, Bank of N.T. Butterfield & Son's four analysts currently expect revenues in 2025 to be US$583.1m, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 4.3% to US$4.91 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$573.6m and earnings per share (EPS) of US$4.59 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

Check out our latest analysis for Bank of N.T. Butterfield & Son

The consensus price target was unchanged at US$46.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Bank of N.T. Butterfield & Son, with the most bullish analyst valuing it at US$48.00 and the most bearish at US$44.00 per share. This is a very narrow spread of estimates, implying either that Bank of N.T. Butterfield & Son is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 0.5% annualised decline to the end of 2025. That is a notable change from historical growth of 3.8% 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 7.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Bank of N.T. Butterfield & Son 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 Bank of N.T. Butterfield & Son's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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 in mind, we wouldn't be too quick to come to a conclusion on Bank of N.T. Butterfield & Son. Long-term earnings power is much more important than next year's profits. We have forecasts for Bank of N.T. Butterfield & Son going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Bank of N.T. Butterfield & Son you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.