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The latest earnings announcement Gjensidige Forsikring ASA (OB:GJF) released in December 2018 suggested that the company endured a major headwind with earnings falling by -25%. Below is a brief commentary on my key takeaways on how market analysts perceive Gjensidige Forsikring’s earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Market analysts’ consensus outlook for next year seems buoyant, with earnings expanding by a significant 64%. However, GJF’s profits are predicted to be volatile, declining in absolute dollar terms in the following year before rising up again in 2022.
Although it is useful to be aware of the rate of growth each year relative to today’s figure, it may be more beneficial determining the rate at which the company is rising or falling on average every year. The benefit of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Gjensidige Forsikring’s earnings trajectory over time, be more volatile. 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 2.1%. This means, we can expect Gjensidige Forsikring will grow its earnings by 2.1% every year for the next couple of years.
For Gjensidige Forsikring, I’ve put together three pertinent 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 GJF 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 GJF is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GJF? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.