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How Do Analysts See OneSavings Bank Plc (LON:OSB) Performing In The Years Ahead?

Simply Wall St

OneSavings Bank Plc's (LON:OSB) latest earnings update in December 2018 signalled that the company experienced a small tailwind, eventuating to a single-digit earnings growth of 9.2%. Below is a brief commentary on my key takeaways on how market analysts view OneSavings Bank's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

See our latest analysis for OneSavings Bank

Analysts' outlook for this coming year seems positive, with earnings growing by a robust 21%. This growth seems to continue into the following year with rates reaching double digit 42% compared to today’s earnings, and finally hitting UK£246m by 2022.

LSE:OSB Past and Future Earnings, April 16th 2019

While it is helpful to understand the growth each year relative to today’s figure, it may be more valuable to determine the rate at which the company is moving every year, on average. The benefit of this method is that we can get a bigger picture of the direction of OneSavings Bank's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 19%. This means, we can presume OneSavings Bank will grow its earnings by 19% every year for the next couple of years.

Next Steps:

For OneSavings Bank, I've compiled three fundamental 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 OSB 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 OSB is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of OSB? 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.