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After Selvaag Bolig ASA's (OB:SBO) earnings announcement on 31 March 2019, the consensus outlook from analysts appear bearish, with earnings expected to decline by 6.9% in the upcoming year relative to the past 5-year average growth rate of 20%. With trailing-twelve-month net income at current levels of øre567m, the consensus growth rate suggests that earnings will decline to øre528m by 2020. Below is a brief commentary around Selvaag Bolig's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
See our latest analysis for Selvaag Bolig
Exciting times ahead?
The 3 analysts covering SBO view its longer term outlook with a negative sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of SBO's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, SBO's earnings should reach øre512m, from current levels of øre567m, resulting in an annual growth rate of -3.3%. This leads to an EPS of NOK5.01 in the final year of projections relative to the current EPS of NOK6.14. The bottom-line decline seems to be caused by cost outpacing top line growth of 6.4% over the next few years. Furthermore, the current 17% margin is expected to contract to 13% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Selvaag Bolig, I've put together three fundamental aspects you should further examine:
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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 Selvaag Bolig 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 Selvaag Bolig 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 Selvaag Bolig? 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.