This Analyst Just Made A Neat Upgrade To Their Sogn Sparebank (OB:SOGN) Earnings Forecasts

Sogn Sparebank (OB:SOGN) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to next year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.

Following the upgrade, the latest consensus from Sogn Sparebank's lone analyst is for revenues of kr187m in 2023, which would reflect a decent 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 47% to kr15.78. Prior to this update, the analyst had been forecasting revenues of kr164m and earnings per share (EPS) of kr13.87 in 2023. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

View our latest analysis for Sogn Sparebank

As a result, it might be a surprise to see that the analyst has cut their price target 6.7% to kr139, which could suggest the forecast improvement in performance is not expected to last.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Sogn Sparebank's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.9% per year. So it's pretty clear that, while Sogn Sparebank's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for next year. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Sogn Sparebank could be one for the watch list.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.