What Do Analysts Think About Metso Corporation’s (HEL:METSO) Earnings Trend?
The most recent earnings update Metso Corporation’s (HLSE:METSO) released in December 2017 indicated that the company faced a significant headwind with earnings deteriorating by -21.54%. Today I want to provide a brief commentary on how market analysts view Metso’s earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. See our latest analysis for Metso
Market analysts’ consensus outlook for next year seems positive, with earnings expanding by a significant 91.89%. This strong growth in earnings is expected to continue, bringing the bottom line up to €262.94M by 2021.
Even though it is helpful to be aware of the growth year by year relative to today’s value, it may be more beneficial to gauge the rate at which the company is rising or falling on average every year. The benefit of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Metso’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted 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 26.57%. This means, we can expect Metso will grow its earnings by 26.57% every year for the next couple of years.
Next Steps:
For Metso, I’ve put together three pertinent 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 METSO 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 METSO is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of METSO? 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.
