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How Do Analysts See Autoliv, Inc. (NYSE:ALV) Performing Over The Next Year?

Simply Wall St

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In March 2019, Autoliv, Inc. (NYSE:ALV) released its earnings update. Generally, it seems that analyst forecasts are substantially optimistic, with profits predicted to ramp up by an impressive 83% next year, compared with the historical 5-year average growth rate of 4.2%. Currently with trailing-twelve-month earnings of US$376m, we can expect this to reach US$689m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Autoliv in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for Autoliv

How is Autoliv going to perform in the near future?

Longer term expectations from the 22 analysts covering ALV’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of ALV'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.

NYSE:ALV Past and Future Earnings, July 18th 2019

This results in an annual growth rate of 15% based on the most recent earnings level of US$376m to the final forecast of US$871m by 2022. EPS reaches $8.73 in the final year of forecast compared to the current $4.32 EPS today. With a current profit margin of 4.3%, this movement will result in a margin of 8.8% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Autoliv, there are three pertinent aspects you should further research:

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