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The latest earnings announcement OneSavings Bank Plc (LON:OSB) released in March 2019 showed that the business gained from a slight tailwind, eventuating to a single-digit earnings growth of 9.2%. Below, I’ve presented key growth figures on how market analysts perceive OneSavings Bank’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts’ outlook for next year seems buoyant, with earnings expanding by a robust 16%. This growth seems to continue into the following year with rates arriving at double digit 23% compared to today’s earnings, and finally hitting UK£184m by 2022.
While it’s informative understanding the rate of growth each year relative to today’s value, it may be more insightful to determine the rate at which the earnings are moving every year, on average. The advantage of this technique is that we can get a better picture of the direction of OneSavings Bank’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 9.8%. This means that, we can presume OneSavings Bank will grow its earnings by 9.8% every year for the next couple of years.
For OneSavings Bank, I’ve compiled three pertinent factors you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is OSB worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether OSB is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of OSB? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.