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Will Danieli & C. Officine Meccaniche S.p.A.’s (BIT:DAN) Earnings Grow In The Next 12 Months?

Simply Wall St

Since Danieli & C. Officine Meccaniche S.p.A. (BIT:DAN) released its earnings in June 2018, analyst consensus outlook appear vastly optimistic, as a 58% rise in profits is expected in the upcoming year, against the past 5-year average growth rate of -26%. With trailing-twelve-month net income at current levels of €58m, we should see this rise to €92m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for Danieli & C. Officine Meccaniche

Can we expect Danieli & C. Officine Meccaniche to keep growing?

Over the next three years, it seems the consensus view of the 7 analysts covering DAN 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.

BIT:DAN Past and Future Earnings, March 5th 2019

This results in an annual growth rate of 24% based on the most recent earnings level of €58m to the final forecast of €131m by 2022. This leads to an EPS of €1.69 in the final year of projections relative to the current EPS of €0.78. With a current profit margin of 2.2%, this movement will result in a margin of 4.2% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Danieli & C. Officine Meccaniche, I’ve put together three important 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 Danieli & C. Officine Meccaniche 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 Danieli & C. Officine Meccaniche is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Danieli & C. Officine Meccaniche? 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.