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What Are Analysts Saying About Acerinox, S.A.'s (BME:ACX) Future?

Simply Wall St

The latest earnings release Acerinox, S.A.'s (BME:ACX) announced in December 2018 suggested that the business gained from a slight tailwind, eventuating to a single-digit earnings growth of 1.3%. Below, I've presented key growth figures on how market analysts predict Acerinox's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Acerinox

Analysts' outlook for the upcoming year seems pessimistic, with earnings declining by -7.2%. But in the following year, there is a complete contrast in performance, with reaching double digit 8.2% compared to today’s level and continues to increase to €269m in 2022.

BME:ACX Past and Future Earnings, April 18th 2019

While it’s informative understanding the rate of growth each year relative to today’s level, it may be more valuable gauging the rate at which the earnings are rising or falling on average every year. The advantage of this approach is that we can get a bigger picture of the direction of Acerinox's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 4.7%. This means that, we can anticipate Acerinox will grow its earnings by 4.7% every year for the next couple of years.

Next Steps:

For Acerinox, I've compiled three key aspects 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 ACX 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 ACX is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ACX? 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.