Since Jaeren Sparebank (OB:JAEREN) released its earnings in December 2018, analyst consensus outlook appear vastly optimistic, as a 98% rise in profits is expected in the upcoming year, relative to the historical 5-year average growth rate of -0.7%. With trailing-twelve-month net income at current levels of øre66m, we should see this rise to øre130m in 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Jaerenrebank in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from Jaerenrebank in the longer term?
Over the next three years, it seems the consensus view of the 2 analysts covering JAEREN is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of JAEREN’s earnings growth over these next few years.
This results in an annual growth rate of 15% based on the most recent earnings level of øre66m to the final forecast of øre140m by 2022. This leads to an EPS of NOK15.24 in the final year of projections relative to the current EPS of NOK13.3. In 2022, JAEREN’s profit margin will have expanded from 21% to 42%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Jaerenrebank, I’ve compiled three important factors you should look at:
- 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 Jaerenrebank 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 Jaerenrebank is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Jaerenrebank? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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