What Should Investors Know About Norway Royal Salmon AS’s (OB:NRS) Future?

In March 2019, Norway Royal Salmon AS (OB:NRS) announced its earnings update. Overall, analyst forecasts seem fairly subdued, as a 16% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 21%. With trailing-twelve-month net income at current levels of kr705m, we should see this rise to kr819m in 2020. Below is a brief commentary on the longer term outlook the market has for Norway Royal Salmon. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for Norway Royal Salmon

How is Norway Royal Salmon going to perform in the near future?

The longer term view from the 6 analysts covering NRS is one of positive 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 NRS, 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.

OB:NRS Past and Future Earnings, August 24th 2019
OB:NRS Past and Future Earnings, August 24th 2019

From the current net income level of kr705m and the final forecast of kr1.1b by 2022, the annual rate of growth for NRS’s earnings is 17%. EPS reaches NOK22.15 in the final year of forecast compared to the current NOK16.21 EPS today. Margins are currently sitting at 14%, which is expected to expand to 19% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Norway Royal Salmon, I’ve put together three key aspects you should look at:

  1. 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.
  2. Valuation: What is Norway Royal Salmon 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 Norway Royal Salmon is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Norway Royal Salmon? 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 editorial-team@simplywallst.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.