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Danieli & C. Officine Meccaniche S.p.A. (BIT:DAN): Will The Growth Last?

The most recent earnings release Danieli & C. Officine Meccaniche S.p.A.’s (BIT:DAN) announced in June 2018 revealed that the company gained from a strong tailwind, eventuating to a double-digit earnings growth of 16%. Below, I’ve presented key growth figures on how market analysts view Danieli & C. Officine Meccaniche’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Danieli & C. Officine Meccaniche

Market analysts’ prospects for this coming year seems positive, with earnings expanding by a significant 59%. This high growth in earnings is expected to continue, bringing the bottom line up to €127m by 2021.

BIT:DAN Future Profit December 14th 18

Even though it is useful to be aware of the rate of growth each year relative to today’s figure, it may be more insightful evaluating the rate at which the company is growing on average every year. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Danieli & C. Officine Meccaniche’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 24%. This means that, we can assume Danieli & C. Officine Meccaniche will grow its earnings by 24% every year for the next few years.

Next Steps:

For Danieli & C. Officine Meccaniche, I’ve put together three fundamental factors you should further examine:

  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 DAN 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 DAN is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DAN? 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 editorial-team@simplywallst.com.