After Swiss Prime Site AG's (VTX:SPSN) earnings announcement in December 2018, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 25% next year relative to the past 5-year average growth rate of 0.4%. Presently, with latest-twelve-month earnings at CHF310m, we should see this growing to CHF388m by 2020. Below is a brief commentary around Swiss Prime Site's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from Swiss Prime Site in the longer term?
The longer term expectations from the 4 analysts of SPSN is tilted towards the negative sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of -1.3% based on the most recent earnings level of CHF310m to the final forecast of CHF320m by 2022. EPS reaches CHF4.22 in the final year of forecast compared to the current CHF4.27 EPS today. The bottom-line decline seems to be caused by cost outpacing top line growth of 3.2% over the next few years. Furthermore, the current 25% margin is expected to contract to 24% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Swiss Prime Site, I've compiled 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 Swiss Prime Site 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 Swiss Prime Site is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Swiss Prime Site? 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 firstname.lastname@example.org. 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.