What Are Analysts Expecting From Arkema S.A. (EPA:AKE) Over The Next Year?
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Looking at Arkema S.A.'s (EPA:AKE) recent earnings update on 31 March 2019, analyst forecasts appear to be bearish, as a 1.4% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 28%. Currently with a trailing-twelve-month profit of €674m, the consensus growth rate suggests that earnings will drop to €665m by 2020. Below is a brief commentary around Arkema's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Arkema
How is Arkema going to perform in the near future?
The longer term expectations from the 18 analysts of AKE is tilted towards the 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 AKE'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.
From the current net income level of €674m and the final forecast of €795m by 2022, the annual rate of growth for AKE’s earnings is 7.7%. This leads to an EPS of €9.57 in the final year of projections relative to the current EPS of €8.84. With a current profit margin of 7.6%, this movement will result in a margin of 8.1% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Arkema, I've compiled three key aspects 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 Arkema 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 Arkema is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Arkema? 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.
