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Since SpareBank 1 SR-Bank ASA (OB:SRBANK) released its earnings in March 2019, analysts seem cautiously bearish, with profits predicted to rise by 2.8% next year against the higher past 5-year average growth rate of 3.8%. Presently, with latest-twelve-month earnings at øre2.3b, we should see this growing to øre2.4b by 2020. Below is a brief commentary around SpareBank 1 SR-Bank’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect SpareBank 1 SR-Bank to keep growing?
The view from 7 analysts over the next three years is one of negative sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for SRBANK, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
By 2022, SRBANK’s earnings should reach øre2.2b, from current levels of øre2.3b, resulting in an annual growth rate of -4.0%. However, if we exclude extraordinary items from earnings, we see that the profits is predicted to rise over time, resulting in an EPS of NOK10.87 in the final year of forecast compared to the current NOK8.96 EPS today. Earnings decline appears to be a result of cost growth exceeding top-line growth of 1.8% in the next three years. Furthermore, the current 45% margin is expected to contract to 38% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For SpareBank 1 SR-Bank, I’ve put together three relevant factors you should further research:
- 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 SR-Bank 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 SR-Bank is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SpareBank 1 SR-Bank? 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 email@example.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.