Buzzi Unicem S.p.A. (BIT:BZU): Earnings To Drop Next Year
In December 2018, Buzzi Unicem S.p.A. (BIT:BZU) released its earnings update. Generally, the consensus outlook from analysts appear bearish, with profits predicted to drop by 15% next year against the past 5-year average growth rate of 45%. With trailing-twelve-month net income at current levels of €382m, the consensus growth rate suggests that earnings will decline to €323m by 2020. Below is a brief commentary on the longer term outlook the market has for Buzzi Unicem. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for Buzzi Unicem
Exciting times ahead?
The view from 11 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of BZU'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 €382m and the final forecast of €389m by 2022, the annual rate of growth for BZU’s earnings is 2.4%. EPS reaches €1.88 in the final year of forecast compared to the current €1.87 EPS today. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 13% to 12% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Buzzi Unicem, there are three fundamental factors 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 Buzzi Unicem 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 Buzzi Unicem is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Buzzi Unicem? 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.
