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In December 2018, Voss Veksel- og Landmandsbank ASA (OB:VVL) released its latest earnings announcement, which signalled that the business gained from a strong tailwind, leading to a high double-digit earnings growth of 89%. Below is a brief commentary on my key takeaways on how market analysts predict Voss Veksel- og Landmandsbank’s earnings growth outlook 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.
Analysts’ expectations for next year seems pessimistic, with earnings decreasing by -8.9%. Over the medium term, earnings are predicted to continue to be below today’s level, with a decline of -2.6% in 2021, eventually reaching øre37m in 2022.
Even though it is useful to understand the rate of growth each year relative to today’s figure, it may be more valuable evaluating the rate at which the company is rising or falling every year, on average. The advantage of this technique is that we can get a bigger picture of the direction of Voss Veksel- og Landmandsbank’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 0.7%. This means that, we can expect Voss Veksel- og Landmandsbank will grow its earnings by 0.7% every year for the next couple of years.
For Voss Veksel- og Landmandsbank, I’ve compiled three pertinent 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 VVL 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 VVL is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of VVL? 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.