Since CaixaBank, S.A. (BME:CABK) released its earnings in December 2018, analyst forecasts seem fairly subdued, as a 1.5% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 34%. By 2020, we can expect CaixaBank’s bottom line to reach €2.0b, a jump from the current trailing-twelve-month of €2.0b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for CaixaBank in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Can we expect CaixaBank to keep growing?
Longer term expectations from the 16 analysts covering CABK’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around 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 CABK's earnings growth over these next few years.
From the current net income level of €2.0b and the final forecast of €2.4b by 2022, the annual rate of growth for CABK’s earnings is 7.8%. EPS reaches €0.40 in the final year of forecast compared to the current €0.33 EPS today. Margins are currently sitting at 25%, which is expected to expand to 26% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For CaixaBank, there are three fundamental 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 CaixaBank 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 CaixaBank is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CaixaBank? 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 firstname.lastname@example.org. 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.