As Banco de Sabadell, S.A. (BME:SAB) announced its earnings release on 30 June 2019, the consensus outlook from analysts appear fairly confident, as a 20% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 3.0%. With trailing-twelve-month net income at current levels of €277m, we should see this rise to €331m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Exciting times ahead?
The 17 analysts covering SAB view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of SAB'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.
This results in an annual growth rate of 0.9% based on the most recent earnings level of €277m to the final forecast of €335m by 2022. EPS reaches €0.15 in the final year of forecast compared to the current €0.050 EPS today. By the end of 2022, analysts are expecting earnings to outpace revenue, and margins to expand from the current 6.6% to 7.1%.
Future outlook is only one aspect when you're building an investment case for a stock. For Banco de Sabadell, there are three fundamental 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 Banco de Sabadell 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 Banco de Sabadell is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Banco de Sabadell? 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 email@example.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.