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Based on AB Electrolux (publ)'s (STO:ELUX B) earnings update on 30 June 2019, analysts seem cautiously bearish, with profits predicted to rise by 20% next year compared with the higher past 5-year average growth rate of 23%. By 2020, we can expect AB Electrolux’s bottom line to reach kr4.6b, a jump from the current trailing-twelve-month of kr3.8b. Below is a brief commentary around AB Electrolux's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 13 analysts covering ELUX B is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for ELUX B, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
By 2022, ELUX B's earnings should reach kr6.1b, from current levels of kr3.8b, resulting in an annual growth rate of 17%. This leads to an EPS of SEK21.3 in the final year of projections relative to the current EPS of SEK13.24. In 2022, ELUX B's profit margin will have expanded from 3.1% to 4.6%.
Future outlook is only one aspect when you're building an investment case for a stock. For AB Electrolux, I've compiled three important aspects 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 AB Electrolux 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 AB Electrolux is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of AB Electrolux? 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 firstname.lastname@example.org. 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.