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What Are Analysts Saying About Rubis’s (EPA:RUI) Earnings Trajectory?

Simply Wall St

The latest earnings update Rubis (EPA:RUI) released in December 2018 suggested that the business endured a minor headwind with earnings falling from €266m to €254m, a change of -4.3%. Below, I’ve presented key growth figures on how market analysts predict Rubis’s earnings growth trajectory over the next couple of 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.

Check out our latest analysis for Rubis

Analysts’ expectations for this coming year seems optimistic, with earnings increasing by a robust 25%. This growth seems to continue into the following year with rates arriving at double digit 31% compared to today’s earnings, and finally hitting €358m by 2022.

ENXTPA:RUI Past and Future Earnings, March 15th 2019

While it’s informative understanding the growth year by year relative to today’s value, it may be more valuable analyzing the rate at which the earnings are rising or falling every year, on average. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of Rubis’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted 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 12%. This means, we can presume Rubis will grow its earnings by 12% every year for the next couple of years.

Next Steps:

For Rubis, I’ve compiled three important aspects you should further examine:

  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 RUI 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 RUI is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of RUI? 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.