In June 2018, Andritz AG (VIE:ANDR) announced its earnings update. Overall, analysts seem fairly confident, as a 22.20% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 5.62%. Currently with trailing-twelve-month earnings of €232.78m, we can expect this to reach €284.47m by 2019. Below is a brief commentary around Andritz’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
How will Andritz perform in the near future?
Over the next three years, it seems the consensus view of the 15 analysts covering ANDR is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of ANDR’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.
From the current net income level of €262.97m and the final forecast of €355.18m by 2021, the annual rate of growth for ANDR’s earnings is 8.51%. EPS reaches €3.08 in the final year of forecast compared to the current €2.58 EPS today. Growth in the bottom line seems to suggest cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 4.46%, this movement will result in a margin of 5.54% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For Andritz, there are three relevant 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 Andritz 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 Andritz is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Andritz? 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 past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.