In June 2019, Compagnie Générale des Établissements Michelin (EPA:ML) announced its earnings update. Overall, analysts seem cautiously optimistic, as a 25% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 11%. With trailing-twelve-month net income at current levels of €1.7b, we should see this rise to €2.1b in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Compagnie Générale des Établissements Michelin in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Compagnie Générale des Établissements Michelin to keep growing?
The longer term expectations from the 16 analysts of ML is tilted towards the 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 ML'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.
By 2022, ML's earnings should reach €2.2b, from current levels of €1.7b, resulting in an annual growth rate of 7.4%. EPS reaches €11.91 in the final year of forecast compared to the current €9.3 EPS today. With a current profit margin of 7.6%, this movement will result in a margin of 9.2% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Compagnie Générale des Établissements Michelin, I've compiled three relevant factors 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 Compagnie Générale des Établissements Michelin 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 Compagnie Générale des Établissements Michelin is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Compagnie Générale des Établissements Michelin? 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.