Yahoo Finance Will Secure Trust Bank Plc's (LON:STB) Earnings Grow In The Next Couple Of Years?
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In December 2018, Secure Trust Bank Plc (LON:STB) announced its latest earnings update, which signalled that the company gained from a strong tailwind, eventuating to a double-digit earnings growth of 42%. Today I want to provide a brief commentary on how market analysts predict Secure Trust Bank's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Secure Trust Bank
Market analysts' prospects for next year seems optimistic, with earnings increasing by a robust 15%. This growth seems to continue into the following year with rates arriving at double digit 42% compared to today’s earnings, and finally hitting UK£47m by 2022.
Although it’s helpful to understand the rate of growth year by year relative to today’s figure, it may be more beneficial estimating the rate at which the earnings are rising or falling every year, on average. The pro of this method is that we can get a better picture of the direction of Secure Trust Bank'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've inserted 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 18%. This means that, we can assume Secure Trust Bank will grow its earnings by 18% every year for the next few years.
Next Steps:
For Secure Trust Bank, I've put together three key factors you should further examine:
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.
Valuation: What is STB 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 STB is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of STB? 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.
