In December 2018, Suez SA (EPA:SEV) released its earnings update. Generally, analysts seem fairly confident, with profits predicted to increase by 39% next year against the past 5-year average growth rate of -5.8%. Presently, with latest-twelve-month earnings at €290m, we should see this growing to €405m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Suez to keep growing?
Longer term expectations from the 13 analysts covering SEV’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 SEV'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.
This results in an annual growth rate of 12% based on the most recent earnings level of €290m to the final forecast of €463m by 2022. EPS reaches €0.75 in the final year of forecast compared to the current €0.47 EPS today. With a current profit margin of 1.7%, this movement will result in a margin of 2.5% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Suez, there are three fundamental 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 Suez 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 Suez is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Suez? 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.