SpareBank 1 SR-Bank ASA Just Beat EPS By 7.0%: Here's What Analysts Think Will Happen Next

Last week saw the newest full-year earnings release from SpareBank 1 SR-Bank ASA (OB:SRBNK), an important milestone in the company's journey to build a stronger business. The result was positive overall - although revenues of kr6.6b were in line with what the analysts predicted, SpareBank 1 SR-Bank surprised by delivering a statutory profit of kr12.08 per share, modestly greater than expected. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for SpareBank 1 SR-Bank

Taking into account the latest results, the current consensus from SpareBank 1 SR-Bank's five analysts is for revenues of kr6.92b in 2022, which would reflect a modest 5.7% increase on its sales over the past 12 months. Statutory earnings per share are forecast to decrease 3.3% to kr11.69 in the same period. In the lead-up to this report, the analysts had been modelling revenues of kr6.87b and earnings per share (EPS) of kr11.42 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at kr149, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values SpareBank 1 SR-Bank at kr155 per share, while the most bearish prices it at kr140. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SpareBank 1 SR-Bank is an easy business to forecast or the the analysts are all using similar assumptions.

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 clear from the latest estimates that SpareBank 1 SR-Bank's rate of growth is expected to accelerate meaningfully, with the forecast 5.7% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 4.5% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.7% per year. SpareBank 1 SR-Bank is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards SpareBank 1 SR-Bank following these results. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for SpareBank 1 SR-Bank going out to 2024, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with SpareBank 1 SR-Bank .

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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.