Sparebanken Møre’s (OB:MORG) announced its latest earnings update in December 2017, which showed that the company experienced a minor headwind with earnings falling from ØRE285.00M to ØRE276.00M, a change of -3.16%. Investors may find it useful to understand how market analysts view Sparebanken Møre’s earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Sparebanken Møre

Analysts’ expectations for next year seems optimistic, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally reaching ØRE621.10M in 2021.

Although it is informative understanding the growth each year relative to today’s level, it may be more valuable to determine the rate at which the earnings are growing on average every year. The benefit of this technique is that we can get a better picture of the direction of Sparebanken Møre’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 21.83%. This means that, we can presume Sparebanken Møre will grow its earnings by 21.83% every year for the next couple of years.

Next Steps:

For Sparebanken Møre, I’ve put together three pertinent 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 MORG 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 MORG is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MORG? 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 pass 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.