What Do Analysts Think About Koninklijke DSM NV.’s (AMS:DSM) Growth?
The latest earnings announcement Koninklijke DSM NV.’s (ENXTAM:DSM) released in December 2017 indicated that the company benefited from a major tailwind, more than doubling its earnings from the prior year. Today I want to provide a brief commentary on how market analysts predict Koninklijke DSM’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. View our latest analysis for Koninklijke DSM
Analysts’ outlook for this coming year seems pessimistic, with earnings declining by a double-digit -54.54%. In the next couple of years, earnings are predicted to continue to be below today’s level, with a decline of -52.97% in 2020, eventually reaching €828.13M in 2021.
Even though it is informative knowing the rate of growth year by year relative to today’s figure, it may be more insightful evaluating the rate at which the company is rising or falling on average every year. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Koninklijke DSM’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -20.79%. This means that, we can presume Koninklijke DSM will chip away at a rate of -20.79% every year for the next few years.
Next Steps:
For Koninklijke DSM, there are three important 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 DSM 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 DSM is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DSM? 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 pass 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.
