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BPER Banca S.p.A. (BIT:BPE): Immense Growth Potential?

Simply Wall St

Since BPER Banca S.p.A. (BIT:BPE) released its earnings in March 2019, analyst consensus outlook appear cautiously subdued, as a 12% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 40%. By 2020, we can expect BPER Banca’s bottom line to reach €452m, a jump from the current trailing-twelve-month of €402m. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for BPER Banca

How will BPER Banca perform in the near future?

The longer term expectations from the 8 analysts of BPE is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for BPE, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

BIT:BPE Past and Future Earnings, August 7th 2019

By 2022, BPE's earnings should reach €767m, from current levels of €402m, resulting in an annual growth rate of 20%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of €0.71 in the final year of forecast compared to the current €0.84 EPS today. With a current profit margin of 22%, this movement will result in a margin of 29% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For BPER Banca, there are three fundamental factors you should look at:

  1. 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.
  2. Valuation: What is BPER Banca 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 BPER Banca is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of BPER Banca? 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 editorial-team@simplywallst.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.