HomeStreet Inc. (NASDAQ: HMST) has confirmed that it will release its Q4 2021 earnings on Monday, January 24, 2022, after market close.
What to look for
HomeStreet is a profitable company which is good news as investors are always looking at businesses that consistently produce profitability. In addition, the company has had exceptional annual EPS growth of 46% compounded over the past three years. Interestingly not all revenue of the company in 2021 will be from operations, so investors should be keen on its numbers once it releases its Q4 2021 results.
Earnings: Stockearning’s Estimated EPS for the quarter is expected to be $1.312. In the last quarter, the financial services provider had EPS of $1.31, beating estimates by 16.96%. Historical EPS Performance shows that in the past 12 quarters, the company has topped estimates nine times (75%) and missed thrice (25%).
Revenue: The company expects revenue of $86.25 million in the fourth quarter of 2021. In the last quarter, the company reported revenue of $81.78 million missing on estimates of $82.98 million.
Stock movement: HMST shares have gained 28.4% since the company released its third-quarter earnings. Interestingly, HMST shares have been UP 20 times out of the past 36 quarters. So, the historical price reaction suggests a 55% probability of the share price going UP once the company reports its fiscal Q4 2021 earnings. According to the Stockearning algorithm, the predicted first-day move is 3%, while the predicted move on the seventh day is 4%.
What analysts are saying
Wedbush analyst David Chiaverini upgraded the stock from Hold to Buy and also raised the price target from $49 to $63. The analyst cited the company's changing business model, "increasingly less reliant on choppy mortgage revenues," the above industry average long-term loan expansion and growth in net interest income outlook, which is guided to 10 percent -15 percent growth beyond 2022, its positive efficiency ratio outlook, and its solid return of capital measures, such as dividends and share repurchases as the reason for the upgrade.
B. Riley analyst Steve Moss raised his price target in HMST from $56 to $60 and reiterated a Buy rating in the stock post Q3 results. Moss said that the company’s loan growth is likely to improve because of sustained production and low commercial loan sales.
DA Davidson analyst Jeff Rules downgraded HMST from Buy to Hold and also raised the price target from $43 to $49. In a research note to investors, the analyst says that while HomStreet's recent growth is "not expected" to be "forfeited," a "substantial" improvement from 2020's good Performance will be difficult in the near term. According to Rules, the stock's upside in 2020 was based on a "heavily used" share buyback program, an institutional strategy shift expense cuts, a rise in loan activity, and a liabilities-sensitive balance sheet.
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