Avanza Bank Holding AB (publ) (STO:AZA): What Are The Future Prospects?

Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize!

Looking at Avanza Bank Holding AB (publ)’s (STO:AZA) earnings update in December 2018, the consensus outlook from analysts appear fairly confident, as a 17% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 11%. Presently, with latest-twelve-month earnings at kr384m, we should see this growing to kr449m by 2020. Below is a brief commentary around Avanza Bank Holding’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for Avanza Bank Holding

What can we expect from Avanza Bank Holding in the longer term?

Longer term expectations from the 3 analysts covering AZA’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for AZA, 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.

OM:AZA Future Profit February 20th 19
OM:AZA Future Profit February 20th 19

This results in an annual growth rate of 17% based on the most recent earnings level of kr384m to the final forecast of kr636m by 2022. This leads to an EPS of SEK21.08 in the final year of projections relative to the current EPS of SEK12.76. Margins are currently sitting at 31%, which is expected to expand to 42% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Avanza Bank Holding, I’ve put together three important aspects you should further research:

  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 Avanza Bank Holding 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 Avanza Bank Holding is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Avanza Bank Holding? 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.