After Alstom SA's (EPA:ALO) earnings announcement in March 2019, analysts seem cautiously bearish, with earnings expected to grow by 0.7% in the upcoming year against the higher past 5-year average growth rate of 38%. With trailing-twelve-month net income at current levels of €433m, we should see this rise to €436m in 2020. Below is a brief commentary on the longer term outlook the market has for Alstom. For those interested in more of an analysis of the company, you can research its fundamentals here.
How is Alstom going to perform in the near future?
The 14 analysts covering ALO view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of ALO'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.
This results in an annual growth rate of 9.5% based on the most recent earnings level of €433m to the final forecast of €576m by 2022. This leads to an EPS of €2.56 in the final year of projections relative to the current EPS of €1.94. With a current profit margin of 5.4%, this movement will result in a margin of 6.2% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Alstom, there are three essential aspects you should further research:
- 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 Alstom 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 Alstom is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Alstom? 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 email@example.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.