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Crédit Agricole S.A. (EPA:ACA): Poised For Long Term Success?

After Crédit Agricole S.A.'s (EPA:ACA) earnings announcement in March 2019, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 4.9% next year relative to the higher past 5-year average growth rate of 13%. With trailing-twelve-month net income at current levels of €4.0b, we should see this rise to €4.2b in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Crédit Agricole in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for Crédit Agricole

How is Crédit Agricole going to perform in the near future?

The 17 analysts covering ACA view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of ACA'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.

ENXTPA:ACA Past and Future Earnings, August 1st 2019
ENXTPA:ACA Past and Future Earnings, August 1st 2019

From the current net income level of €4.0b and the final forecast of €4.6b by 2022, the annual rate of growth for ACA’s earnings is 5.7%. EPS reaches €1.53 in the final year of forecast compared to the current €1.39 EPS today. In 2022, ACA's profit margin will have expanded from 21% to 22%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Crédit Agricole, I've compiled three relevant aspects 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 Crédit Agricole 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 Crédit Agricole is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Crédit Agricole? 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.

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