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Looking at Gestamp Automoción, S.A.'s (BME:GEST) earnings update in March 2019, analysts seem cautiously optimistic, as a 32% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 17%. With trailing-twelve-month net income at current levels of €258m, we should see this rise to €339m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Exciting times ahead?
The view from 12 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of GEST'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.
By 2022, GEST's earnings should reach €403m, from current levels of €258m, resulting in an annual growth rate of 9.7%. This leads to an EPS of €0.64 in the final year of projections relative to the current EPS of €0.45. With a current profit margin of 3.0%, this movement will result in a margin of 3.9% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Gestamp Automoción, there are three important factors you should look at:
- 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 Gestamp Automoción 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 Gestamp Automoción is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Gestamp Automoción? 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.