In December 2018, Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. (BME:BME) announced its earnings update. Overall, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by -4.6% in the upcoming year compared with the higher past 5-year average growth rate of -2.1%. By 2020, we can expect Bolsas y Mercados Españoles Sociedad Holding de Mercados y Sistemas Financieros’s bottom line to reach €130m, a jump from the current trailing-twelve-month of €136m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Bolsas y Mercados Españoles Sociedad Holding de Mercados y Sistemas Financieros in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Bolsas y Mercados Españoles Sociedad Holding de Mercados y Sistemas Financieros to keep growing?
The view from 8 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, BME's earnings should reach €140m, from current levels of €136m, resulting in an annual growth rate of 0.7%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of €1.62 in the final year of forecast compared to the current €1.64 EPS today. This initial high-growth revenue squeezes BME's margins. However, analysts are expecting earnings growth to catch up, and current margins of 44% to expand to 44% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Bolsas y Mercados Españoles Sociedad Holding de Mercados y Sistemas Financieros, there are three important aspects you should look at:
- 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 Bolsas y Mercados Españoles Sociedad Holding de Mercados y Sistemas Financieros 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 Bolsas y Mercados Españoles Sociedad Holding de Mercados y Sistemas Financieros is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Bolsas y Mercados Españoles Sociedad Holding de Mercados y Sistemas Financieros? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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