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Raiffeisen Bank International AG (VIE:RBI): Is It A Smart Long Term Opportunity?

Simply Wall St

As Raiffeisen Bank International AG (VIE:RBI) released its earnings announcement on 30 June 2019, analysts seem cautiously bearish, with earnings expected to grow by 14% in the upcoming year against the higher past 5-year average growth rate of 48%. By 2020, we can expect Raiffeisen Bank International’s bottom line to reach €1.4b, a jump from the current trailing-twelve-month of €1.2b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Raiffeisen Bank International in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for Raiffeisen Bank International

Can we expect Raiffeisen Bank International to keep growing?

The longer term expectations from the 16 analysts of RBI is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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.

WBAG:RBI Past and Future Earnings, August 19th 2019

From the current net income level of €1.2b and the final forecast of €1.5b by 2022, the annual rate of growth for RBI’s earnings is 6.1%. EPS reaches €3.96 in the final year of forecast compared to the current €3.68 EPS today. With a current profit margin of 24%, this movement will result in a margin of 25% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Raiffeisen Bank International, I've put together three important 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 Raiffeisen Bank International 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 Raiffeisen Bank International is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Raiffeisen Bank International? 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.