SpareBank 1 SMN (OB:MING): What Are The Future Prospects?

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Since SpareBank 1 SMN (OB:MING) released its earnings in December 2018, the consensus outlook from analysts appear highly confident, with profits predicted to ramp up by an impressive 96% next year, relative to the past 5-year average growth rate of -6.8%. By 2020, we can expect SpareBank 1 SMN’s bottom line to reach øre2.5b, a jump from the current trailing-twelve-month of øre1.3b. Below is a brief commentary around SpareBank 1 SMN’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for SpareBank 1 SMN

How will SpareBank 1 SMN perform in the near future?

Over the next three years, it seems the consensus view of the 5 analysts covering MING is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 MING’s earnings growth over these next few years.

OB:MING Past and Future Earnings, May 14th 2019
OB:MING Past and Future Earnings, May 14th 2019

From the current net income level of øre1.3b and the final forecast of øre2.3b by 2022, the annual rate of growth for MING’s earnings is 14%. EPS reaches NOK11.03 in the final year of forecast compared to the current NOK9.98 EPS today. With a current profit margin of 25%, this movement will result in a margin of 37% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For SpareBank 1 SMN, I’ve compiled three pertinent aspects you should further examine:

  1. 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.
  2. Valuation: What is SpareBank 1 SMN 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 SpareBank 1 SMN is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SpareBank 1 SMN? 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 editorial-team@simplywallst.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.