SpareBank 1 Østfold Akershus (OB:SOAG): What We Can Expect From This Growth Stock

In December 2018, SpareBank 1 Østfold Akershus (OB:SOAG) announced its earnings update. Overall, analysts seem cautiously bearish, with profits predicted to rise by -0.4% next year relative to the higher past 5-year average growth rate of 13%. By 2020, we can expect SpareBank 1 Østfold Akershus’s bottom line to reach øre334m, a jump from the current trailing-twelve-month of øre335m. Below is a brief commentary on the longer term outlook the market has for SpareBank 1 Østfold Akershus. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for SpareBank 1 Østfold Akershus

Can we expect SpareBank 1 Østfold Akershus to keep growing?

Longer term expectations from the 2 analysts covering SOAG’s stock is one of 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 SOAG’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:SOAG Past and Future Earnings, April 10th 2019
OB:SOAG Past and Future Earnings, April 10th 2019

This results in an annual growth rate of 2.3% based on the most recent earnings level of øre335m to the final forecast of øre367m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of NOK23.79 in the final year of forecast compared to the current NOK27.06 EPS today. Analysts are predicting earnings growth to outpace revenue by the end of 2022, resulting in a margin expansion from 43% to 44%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For SpareBank 1 Østfold Akershus, I’ve compiled three key 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 SpareBank 1 Østfold Akershus 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 Østfold Akershus 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 Østfold Akershus? 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.