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The most recent earnings announcement MERCK Kommanditgesellschaft auf Aktien's (FRA:MRK) released in December 2018 revealed that the company faced a significant headwind with earnings declining by -58%. Below, I've presented key growth figures on how market analysts perceive MERCK Kommanditgesellschaft auf Aktien's earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Market analysts' prospects for next year seems positive, with earnings climbing by a robust 47%. This growth seems to continue into the following year with rates arriving at double digit 69% compared to today’s earnings, and finally hitting €2.1b by 2022.
While it is helpful to understand the growth year by year relative to today’s level, it may be more valuable to analyze the rate at which the business is rising or falling on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of MERCK Kommanditgesellschaft auf Aktien's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 13%. This means that, we can anticipate MERCK Kommanditgesellschaft auf Aktien will grow its earnings by 13% every year for the next couple of years.
For MERCK Kommanditgesellschaft auf Aktien, there are three key 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 MRK 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 MRK is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MRK? 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.