Sandnes Sparebank (OB:SADG): What Are The Future Prospects?

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After Sandnes Sparebank’s (OB:SADG) earnings announcement in December 2018, analysts seem cautiously optimistic, with earnings expected to grow by 43% in the upcoming year compared with the past 5-year average growth rate of 17%. Presently, with latest-twelve-month earnings at øre159m, we should see this growing to øre229m by 2020. Below is a brief commentary around Sandnesrebank’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for Sandnesrebank

Exciting times ahead?

Over the next three years, it seems the consensus view of the 2 analysts covering SADG 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. To understand the overall trajectory of SADG’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

OB:SADG Past and Future Earnings, May 7th 2019
OB:SADG Past and Future Earnings, May 7th 2019

By 2022, SADG’s earnings should reach øre267m, from current levels of øre159m, resulting in an annual growth rate of 16%. This leads to an EPS of NOK7.6 in the final year of projections relative to the current EPS of NOK6.93. With a current profit margin of 28%, this movement will result in a margin of 44% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Sandnesrebank, there are three pertinent factors 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 Sandnesrebank 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 Sandnesrebank is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Sandnesrebank? 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.