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SpareBank 1 Østlandet’s (OB:SPOL) announced its latest earnings update in December 2018, which suggested that the company gained from a strong tailwind, leading to a double-digit earnings growth of 15%. Below is a brief commentary on my key takeaways on how market analysts view SpareBank 1 Østlandet’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
View our latest analysis for SpareBank 1 Østlandet
Market analysts’ prospects for the coming year seems positive, with earnings expanding by a significant 66%. This level of earnings is expected to be maintained over the next couple of years, plateauing at øre1.6b by 2022.
While it’s helpful to understand the rate of growth each year relative to today’s value, it may be more valuable determining the rate at which the business is moving on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of SpareBank 1 Østlandet’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 19%. This means that, we can presume SpareBank 1 Østlandet will grow its earnings by 19% every year for the next few years.
Next Steps:
For SpareBank 1 Østlandet, I’ve put together three fundamental factors 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 SPOL 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 SPOL 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 SPOL? 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. On rare occasion, data errors may occur. Thank you for reading.