What Do Analysts Think About The Future Of KBC Group NV’s (EBR:KBC)?
In June 2018, KBC Group NV (EBR:KBC) announced its earnings update. Overall, it seems that analyst expectations are fairly bearish, as a 10.7% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 31.8%. By 2019, we can expect KBC Group’s bottom line to reach €2.52b, a jump from the current trailing-twelve-month €2.28b. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for KBC Group in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for KBC Group
Exciting times ahead?
The view from 18 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for KBC, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 0.7% based on the most recent earnings level of €2.52b to the final forecast of €2.96b by 2021. This leads to an EPS of €6.56 in the final year of projections relative to the current EPS of €6.04. The primary reason for earnings growth is due to a high top-line growth of 2.9% falling down into the bottom line. By the end of 2021, analysts are expecting earnings to outpace revenue, and margins to expand from the current 32.5% to 35.3%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For KBC Group, I’ve put together three relevant factors 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 KBC Group 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 KBC Group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of KBC Group? 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.
