U.S. Markets closed

How Do Analysts See HeidelbergCement AG (FRA:HEI) Performing In The Year Ahead?

Willa Russo

After HeidelbergCement AG’s (FRA:HEI) earnings announcement in June 2018, it seems that analyst forecasts are fairly optimistic, as a 27.8% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 12.7%. Currently with trailing-twelve-month earnings of €1.05b, we can expect this to reach €1.35b by 2019. Below is a brief commentary around HeidelbergCement’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for HeidelbergCement

How is HeidelbergCement going to perform in the near future?

The longer term expectations from the 22 analysts of HEI 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. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of HEI’s earnings growth over these next few years.

DB:HEI Future Profit September 26th 18

By 2021, HEI’s earnings should reach €1.86b, from current levels of €968.5m, resulting in an annual growth rate of 16.4%. This leads to an EPS of €10.05 in the final year of projections relative to the current EPS of €4.88. The main reason for growth is a result of cost cutting activities, as revenues is expected to grow much slower than earnings. In 2021, HEI’s profit margin will have expanded from 5.6% to 9.1%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For HeidelbergCement, I’ve put together three fundamental factors 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 HeidelbergCement 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 HeidelbergCement is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of HeidelbergCement? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.