What Are Analysts Saying About innogy SE’s (FRA:IGY) Future?
In December 2017, innogy SE (DB:IGY) released its latest earnings announcement, which revealed that the company endured a significant headwind with earnings deteriorating by -48.58%. Below, I’ve laid out key numbers on how market analysts perceive innogy’s earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. View our latest analysis for innogy
Market analysts’ prospects for the coming year seems optimistic, with earnings rising by a significant 55.66%. This level of earnings is expected to be maintained over the next couple of years, plateauing at €1.29B by 2021.
Although it is useful to understand the rate of growth year by year relative to today’s level, it may be more beneficial estimating the rate at which the earnings are moving on average every year. The pro of this approach is that we can get a better picture of the direction of innogy’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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 10.89%. This means that, we can presume innogy will grow its earnings by 10.89% every year for the next few years.
Next Steps:
For innogy, I’ve put together three pertinent 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 IGY 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 IGY is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of IGY? 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 pass 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.
