In December 2018, SpareBank 1 SR-Bank ASA (OB:SRBANK) released its latest earnings announcement, which confirmed that the company experienced a small tailwind, leading to a single-digit earnings growth of 9.9%. Below, I’ve laid out key growth figures on how market analysts view SpareBank 1 SR-Bank’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Market analysts’ prospects for next year seems positive, with earnings increasing by a robust 15%. This growth seems to continue into the following year with rates reaching double digit 15% compared to today’s earnings, and finally hitting øre2.7b by 2022.
Although it is informative understanding the growth rate year by year relative to today’s level, it may be more insightful to analyze the rate at which the company is rising or falling every year, on average. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of SpareBank 1 SR-Bank’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 5.2%. This means, we can anticipate SpareBank 1 SR-Bank will grow its earnings by 5.2% every year for the next couple of years.
For SpareBank 1 SR-Bank, there are three important factors you should look at:
- 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 SRBANK 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 SRBANK is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SRBANK? 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.