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Etn. Fr. Colruyt NV (EBR:COLR): Should The Future Outlook Worry You?

Jonathon Baker

On 30 September 2018, Etn. Fr. Colruyt NV (EBR:COLR) announced its latest earnings update. Overall, analyst consensus outlook appear pessimistic, with profits predicted to drop by -5.8% next year relative to the past 5-year average growth rate of 2.3%. Presently, with latest-twelve-month earnings at €373m, we should see this fall to €352m by 2019. Below is a brief commentary around Etn. Fr. Colruyt’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for Etn. Fr. Colruyt

Exciting times ahead?

The view from 13 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. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of COLR’s earnings growth over these next few years.

ENXTBR:COLR Future Profit December 25th 18

This results in an annual growth rate of 0.9% based on the most recent earnings level of €373m to the final forecast of €368m by 2021. This leads to an EPS of €2.91 in the final year of projections relative to the current EPS of €2.6. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 4.1% to 3.8% by the end of 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Etn. Fr. Colruyt, I’ve put together three relevant aspects you should further research:

  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 Etn. Fr. Colruyt 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 Etn. Fr. Colruyt is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Etn. Fr. Colruyt? 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.