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As SpareBank 1 Østlandet (OB:SPOL) released its earnings announcement on 31 December 2018, analyst consensus outlook appear vastly optimistic, as a 66% rise in profits is expected in the upcoming year, relative to the historical 5-year average growth rate of -1.1%. Presently, with latest-twelve-month earnings at øre976m, we should see this growing to øre1.6b by 2020. Below is a brief commentary on the longer term outlook the market has for SpareBank 1 Østlandet. For those interested in more of an analysis of the company, you can research its fundamentals here.
How will SpareBank 1 Østlandet perform in the near future?
The view from 5 analysts over the next three years 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. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of SPOL’s earnings growth over these next few years.
From the current net income level of øre976m and the final forecast of øre1.6b by 2022, the annual rate of growth for SPOL’s earnings is 19%. This leads to an EPS of NOK9.84 in the final year of projections relative to the current EPS of NOK8.46. In 2022, SPOL’s profit margin will have expanded from 27% to 40%.
Future outlook is only one aspect when you’re building an investment case for a stock. For SpareBank 1 Østlandet, I’ve put together three fundamental aspects you should further examine:
- 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.
- Valuation: What is SpareBank 1 Østlandet 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 Østlandet is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SpareBank 1 Østlandet? 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 firstname.lastname@example.org.