On 30 June 2019, Vicat SA (EPA:VCT) announced its earnings update. Overall, analysts seem cautiously optimistic, as a 24% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 5.7%. Presently, with latest-twelve-month earnings at €151m, we should see this growing to €188m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Vicat in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from Vicat in the longer term?
Over the next three years, it seems the consensus view of the 8 analysts covering VCT is skewed 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 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, VCT's earnings should reach €258m, from current levels of €151m, resulting in an annual growth rate of 15%. EPS reaches €5.29 in the final year of forecast compared to the current €3.37 EPS today. In 2022, VCT's profit margin will have expanded from 5.9% to 7.9%.
Future outlook is only one aspect when you're building an investment case for a stock. For Vicat, there are three key aspects you should further examine:
- 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 Vicat 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 Vicat is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Vicat? 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.