Yahoo Finance Will Swedbank AB (publ)'s (STO:SWED A) Earnings Grow Over The Next Year?
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After Swedbank AB (publ)'s (STO:SWED A) recent earnings announcement in March 2019, analyst forecasts appear to be pessimistic, with earnings expected to decline by 7.8% in the upcoming year against the past 5-year average growth rate of 6.6%. Currently with a trailing-twelve-month profit of kr21b, the consensus growth rate suggests that earnings will drop to kr20b by 2020. Below is a brief commentary on the longer term outlook the market has for Swedbank. For those interested in more of an analysis of the company, you can research its fundamentals here.
See our latest analysis for Swedbank
Can we expect Swedbank to keep growing?
The view from 18 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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.
This results in an annual growth rate of 2.6% based on the most recent earnings level of kr21b to the final forecast of kr21b by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of SEK18.67 in the final year of forecast compared to the current SEK18.96 EPS today. However, the expansion of the current 48% margin is not expected to be sustained, as it begins to contract to 44% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Swedbank, there are three essential factors you should look at:
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 Swedbank 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 Swedbank is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Swedbank? 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.
