Shareholders might have noticed that SpareBank 1 Østlandet (OB:SPOL) filed its yearly result this time last week. The early response was not positive, with shares down 3.7% to kr146 in the past week. It was a pretty mixed result, with revenues beating expectations to hit kr4.4b. Statutory earnings fell 2.1% short of analyst forecasts, reaching kr11.96 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus, from the three analysts covering SpareBank 1 Østlandet, is for revenues of kr4.29b in 2022, which would reflect a small 2.9% reduction in SpareBank 1 Østlandet's sales over the past 12 months. Statutory earnings per share are expected to dip 9.3% to kr10.89 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr4.27b and earnings per share (EPS) of kr11.34 in 2022. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at kr156, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic SpareBank 1 Østlandet analyst has a price target of kr162 per share, while the most pessimistic values it at kr150. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SpareBank 1 Østlandet is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SpareBank 1 Østlandet's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 2.9% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 6.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.1% per year. It's pretty clear that SpareBank 1 Østlandet's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that SpareBank 1 Østlandet's revenues are expected to perform worse than the wider industry. The consensus price target held steady at kr156, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple SpareBank 1 Østlandet analysts - going out to 2023, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for SpareBank 1 Østlandet (1 shouldn't be ignored) you should be aware of.
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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.