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Allianz SE (FRA:ALV): Poised For Long Term Success?

Simply Wall St

On 30 June 2019, Allianz SE (FRA:ALV) announced its earnings update. Overall, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 5.1% next year relative to the past 5-year average growth rate of 3.9%. With trailing-twelve-month net income at current levels of €7.5b, we should see this rise to €7.8b in 2020. Below is a brief commentary on the longer term outlook the market has for Allianz. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for Allianz

How will Allianz perform in the near future?

The longer term view from the 15 analysts covering ALV is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of ALV'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.

DB:ALV Past and Future Earnings, August 16th 2019

By 2022, ALV's earnings should reach €8.4b, from current levels of €7.5b, resulting in an annual growth rate of 3.4%. EPS reaches €21.77 in the final year of forecast compared to the current €17.43 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 7.3% to 5.7% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Allianz, there are three fundamental factors you should look at:

  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 Allianz 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 Allianz is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Allianz? 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.