SpareBank 1 Ringerike Hadeland (OB:RING): Is It A Good Long Term Opportunity?

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SpareBank 1 Ringerike Hadeland’s (OB:RING) most recent earnings update in December 2018 signalled that the company experienced a slight tailwind, eventuating to a single-digit earnings growth of 2.9%. Today I want to provide a brief commentary on how market analysts perceive SpareBank 1 Ringerike Hadeland’s earnings growth trajectory over the next few 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.

View our latest analysis for SpareBank 1 Ringerike Hadeland

Market analysts’ consensus outlook for this coming year seems positive, with earnings rising by a robust 11%. However, earnings is expected to fall in the following year before rising again to øre368m in 2022.

OB:RING Past and Future Earnings, May 8th 2019
OB:RING Past and Future Earnings, May 8th 2019

Although it’s helpful to be aware of the growth each year relative to today’s value, it may be more insightful determining the rate at which the company is moving on average every year. The pro of this method is that we can get a bigger picture of the direction of SpareBank 1 Ringerike Hadeland’s earnings trajectory over the long run, irrespective of near term fluctuations, 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 2.4%. This means that, we can assume SpareBank 1 Ringerike Hadeland will grow its earnings by 2.4% every year for the next few years.

Next Steps:

For SpareBank 1 Ringerike Hadeland, there are three key aspects you should look at:

  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 RING 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 RING is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of RING? 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.