Results: DNB Bank ASA Beat Earnings Expectations And Analysts Now Have New Forecasts

A week ago, DNB Bank ASA (OB:DNB) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Results were good overall, with revenues beating analyst predictions by 3.2% to hit kr22b. Statutory earnings per share (EPS) came in at kr7.04, some 8.2% above whatthe analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus from DNB Bank's 15 analysts is for revenues of kr90.6b in 2025. This would reflect an okay 4.4% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to reduce 6.4% to kr28.23 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr88.6b and earnings per share (EPS) of kr26.95 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

See our latest analysis for DNB Bank

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of kr265, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values DNB Bank at kr310 per share, while the most bearish prices it at kr230. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the DNB Bank's past performance and to peers in the same industry. We would highlight that DNB Bank's revenue growth is expected to slow, with the forecast 5.9% annualised growth rate until the end of 2025 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.1% annually. Even after the forecast slowdown in growth, it seems obvious that DNB Bank is also expected to grow faster than 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 DNB Bank's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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 DNB Bank. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple DNB Bank analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with DNB Bank .

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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.