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What Are Analysts Expecting From Outokumpu Oyj (HEL:OUT1V) In Next 12 Months?

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Alexis Guardo
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Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

On 31 December 2018, Outokumpu Oyj (HEL:OUT1V) announced its latest earnings update. Overall, it seems that analyst forecasts are fairly pessimistic, with profits predicted to drop by -4.8% next year compared with the past 5-year average growth rate of 68%. Presently, with latest-twelve-month earnings at €130m, we should see this fall to €124m by 2020. Below is a brief commentary on the longer term outlook the market has for Outokumpu Oyj. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for Outokumpu Oyj

Can we expect Outokumpu Oyj to keep growing?

Over the next three years, it seems the consensus view of the 17 analysts covering OUT1V is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of OUT1V’s earnings growth over these next few years.

HLSE:OUT1V Future Profit February 9th 19
HLSE:OUT1V Future Profit February 9th 19

From the current net income level of €130m and the final forecast of €267m by 2022, the annual rate of growth for OUT1V’s earnings is 21%. This leads to an EPS of €0.55 in the final year of projections relative to the current EPS of €0.32. In 2022, OUT1V’s profit margin will have expanded from 1.9% to 3.7%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Outokumpu Oyj, I’ve put together three essential 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 Outokumpu Oyj 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 Outokumpu Oyj is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Outokumpu Oyj? 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 editorial-team@simplywallst.com.