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After Aktia Bank plc’s (HEL:AKTIA) recent earnings announcement in September 2018, analyst consensus outlook appear pessimistic, as a -1.6% fall in profits is expected in the upcoming year. Though compared to its 5-year track record of the average earnings growth rate of -3.4%, this is still an improvement. With trailing-twelve-month net income at current levels of €39m, the consensus growth rate suggests that earnings will decline to €39m by 2019. Below is a brief commentary on the longer term outlook the market has for Aktia Bank. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Aktia Bank
How will Aktia Bank perform in the near future?
The longer term expectations from the 2 analysts of AKTIA is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of €39m and the final forecast of €40m by 2021, the annual rate of growth for AKTIA’s earnings is 0.5%. This leads to an EPS of €0.88 in the final year of projections relative to the current EPS of €0.59. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 22% to 19% by the end of 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Aktia Bank, I’ve put together three important aspects you should further research:
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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.
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Valuation: What is Aktia Bank 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 Aktia Bank is currently mispriced by the market.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Aktia Bank? 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 editorial-team@simplywallst.com.