The latest earnings announcement SpareBank 1 SMN (OB:MING) released in December 2018 confirmed that the company benefited from a strong tailwind, eventuating to a double-digit earnings growth of 14%. Today I want to provide a brief commentary on how market analysts predict SpareBank 1 SMN’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts’ expectations for next year seems buoyant, with earnings expanding by a significant 75%. However, MING’s profits are expected to be volatile, declining in absolute dollar terms in the following year before rising up again in 2022.
Even though it’s helpful to be aware of the growth year by year relative to today’s value, it may be more insightful gauging the rate at which the company is rising or falling on average every year. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of SpareBank 1 SMN’s earnings trajectory over time, fluctuate up and down. To compute this rate, I put 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 14%. This means, we can presume SpareBank 1 SMN will grow its earnings by 14% every year for the next couple of years.
For SpareBank 1 SMN, there are three relevant aspects 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 MING 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 MING is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MING? 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 firstname.lastname@example.org. 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.