Stellar Bancorp Faces Crucial Q2 Earnings Test Amid Analyst Scrutiny

Stellar Bancorp, a Texas-based commercial bank, is gearing up to report its Q2 2023 earnings this Friday before market hours. The regional bank had a mixed performance in the previous quarter, missing analysts' revenue expectations by 1% and reporting a 3.4% year-over-year decline in revenues.

As Stellar Bancorp heads into its upcoming earnings release, analysts are expecting the company's revenue to decline 1.8% year-over-year to $104.9 million, an improvement from the 6.1% decrease it recorded in the same quarter last year. Adjusted earnings are projected to come in at $0.45 per share.

The majority of analysts covering Stellar Bancorp have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to maintain its course. However, the bank has a history of missing Wall Street's revenue estimates, having done so twice over the last two years.

In comparison, some of Stellar Bancorp's peers in the regional banks segment have already reported their Q2 results, providing a glimpse into the industry's performance. Popular delivered year-over-year revenue growth of 8.9%, beating analysts' expectations, while City Holding reported a 6.3% revenue increase, also topping estimates.

Investors have shown positive sentiment towards the regional banks segment, with share prices up 7.3% on average over the last month. Stellar Bancorp's stock has also risen 14.8% during the same period and is currently trading at an average analyst price target of $28.60, compared to the current share price of $32.11.