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What Should We Expect From Compagnie de Saint-Gobain SA.’s (EPA:SGO) Earnings In The Years Ahead?

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The most recent earnings update Compagnie de Saint-Gobain SA.’s (ENXTPA:SGO) released in December 2017 indicated that the company gained from a robust tailwind, eventuating to a double-digit earnings growth of 19.45%. Below, I’ve presented key growth figures on how market analysts view Compagnie de Saint-Gobain’s earnings growth trajectory 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. See our latest analysis for Compagnie de Saint-Gobain

Market analysts’ consensus outlook for next year seems optimistic, with earnings rising by a robust 14.03%. This growth seems to continue into the following year with rates reaching double digit 29.91% compared to today’s earnings, and finally hitting €2.34B by 2021.

ENXTPA:SGO Future Profit Mar 29th 18
ENXTPA:SGO Future Profit Mar 29th 18

While it’s helpful to understand the growth rate each year relative to today’s value, it may be more beneficial to analyze the rate at which the business is growing every year, on average. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of Compagnie de Saint-Gobain’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 13.13%. This means, we can anticipate Compagnie de Saint-Gobain will grow its earnings by 13.13% every year for the next couple of years.

Next Steps:

For Compagnie de Saint-Gobain, there are three key 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 SGO 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 SGO is currently mispriced by the market.

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