How Do Analysts See ElringKlinger AG (FRA:ZIL2) Performing Over The Next Few Years?
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ElringKlinger AG's (FRA:ZIL2) most recent earnings announcement in December 2018 signalled that the business endured a substantial headwind with earnings deteriorating by -37%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive ElringKlinger's earnings growth trajectory over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for ElringKlinger
Analysts' expectations for the coming year seems pessimistic, with earnings declining by a double-digit -29%. However, the next few years show a contrast, with earnings growth becoming positive in 2021, with the bottom line increasing to €56m in 2022.
Even though it’s informative understanding the growth each year relative to today’s figure, it may be more insightful analyzing the rate at which the business is growing every year, on average. The benefit of this technique is that we can get a better picture of the direction of ElringKlinger's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute 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 9.0%. This means, we can anticipate ElringKlinger will grow its earnings by 9.0% every year for the next few years.
Next Steps:
For ElringKlinger, I've put together three key 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 ZIL2 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 ZIL2 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ZIL2? 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.
