Based on Aperam S.A.’s (AMS:APAM) recently announced earnings update on 31 December 2018, the consensus outlook from analysts appear bearish, as a -17% fall in profits is expected in the upcoming year against the past 5-year average growth rate of 42%. Presently, with latest-twelve-month earnings at €286m, we should see this fall to €236m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Aperam in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 12 analysts covering APAM is skewed towards the positive 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.
By 2022, APAM’s earnings should reach €347m, from current levels of €286m, resulting in an annual growth rate of 3.1%. EPS reaches €4.36 in the final year of forecast compared to the current €3.39 EPS today. By the end of 2022, analysts are expecting earnings to outpace revenue, and margins to expand from the current 6.1% to 6.3%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Aperam, there are three fundamental aspects 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 Aperam 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 Aperam is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Aperam? 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.