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Does Safran SA's (EPA:SAF) Recent Track Record Look Strong?

Simply Wall St

Analyzing Safran SA's (ENXTPA:SAF) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess SAF's recent performance announced on 30 June 2019 and compare these figures to its long-term trend and industry movements.

Check out our latest analysis for Safran

How Did SAF's Recent Performance Stack Up Against Its Past?

SAF's trailing twelve-month earnings (from 30 June 2019) of €2.2b has jumped 21% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 34%, indicating the rate at which SAF is growing has slowed down. Why could this be happening? Well, let's look at what's going on with margins and whether the entire industry is experiencing the hit as well.

ENXTPA:SAF Income Statement, November 22nd 2019

In terms of returns from investment, Safran has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 5.3% exceeds the FR Aerospace & Defense industry of 3.7%, indicating Safran has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Safran’s debt level, has declined over the past 3 years from 23% to 15%.

What does this mean?

Safran's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Safran has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Safran to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for SAF’s future growth? Take a look at our free research report of analyst consensus for SAF’s outlook.
  2. Financial Health: Are SAF’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.

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.

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. Thank you for reading.