Stock analysts at Simply Wall Street have expressed concern about Butterfield Bank’s future revenue and earnings – but are nevertheless optimistic about the trajectory of the Bermudian company’s share price.

With input from five analysts, Simply Wall Street has forecast that the bank’s share valuation will increase over the next year to trade at $35.20 on the New York Stock Exchange.

Butterfield shares closed on Tuesday at $30.38 on the NYSE. The bank’s shares also trade on the Bermuda Stock Exchange.

In an article on Yahoo! Finance, Simply Wall Street wrote: “Following the recent earnings report, the consensus from five analysts covering Bank of NT Butterfield & Son is for revenues of $558.3 million in 2024. This implies a perceptible 3.5 per cent decline in revenue compared to the last 12 months.

“Statutory earnings per share are expected to shrink 9.5 per cent to $4.25 in the same period. In the lead-up to this report, the analysts had been modelling revenues of $558.3 million and earnings per share of $4.38 in 2024.

“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.”

Simply Wall Street added: “It might be a surprise to learn that the consensus price target was broadly unchanged at $35.20, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

“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.

“There are some variant perceptions on Bank of NT Butterfield & Son, with the most bullish analyst valuing it at $40 and the most bearish at $32 per share.

“Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

“Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates.

“We would highlight that revenue is expected to reverse, with a forecast 3.5 per cent annualised decline to the end of 2024. That is a notable change from historical growth of 1.8 per cent over the last five years.

“Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.8 per cent per year.

“So, although its revenues are forecast to shrink, this cloud does not come with a silver lining – Bank of NT Butterfield & Son is expected to lag the wider industry.”

Simply Wall Street said: “The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Bank of NT Butterfield & Son.

“On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry.

“The consensus price target held steady at $35.20, with the latest estimates not enough to have an impact on their price targets.”

A spokeswoman for Butterfield Bank said: “Our earnings call took place last week and we wouldn’t comment further on analyst forecasts.”