What Should Investors Know About SpareBank 1 Telemark’s (OB:SBTE) Long Term Outlook?

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In December 2018, SpareBank 1 Telemark (OB:SBTE) announced its most recent earnings update, which suggested that the business benefited from a significant tailwind, more than doubling its earnings from the prior year. Below, I’ve laid out key growth figures on how market analysts predict SpareBank 1 Telemark’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

View our latest analysis for SpareBank 1 Telemark

Market analysts’ prospects for the coming year seems rather muted, with earnings growing by a single digit 6.3%. The growth outlook in the following year seems much more positive with rates generating double digit 13% compared to today’s earnings, and finally hitting øre334m by 2022.

OB:SBTE Future Profit February 15th 19
OB:SBTE Future Profit February 15th 19

While it’s useful to understand the growth year by year relative to today’s value, it may be more insightful to estimate the rate at which the earnings are moving every year, on average. The pro of this approach is that we can get a better picture of the direction of SpareBank 1 Telemark’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 5.0%. This means, we can assume SpareBank 1 Telemark will grow its earnings by 5.0% every year for the next few years.

Next Steps:

For SpareBank 1 Telemark, I’ve put together three essential factors you should further research:

  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 SBTE 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 SBTE is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SBTE? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.