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What Should We Expect From Hannover Rück SE's (FRA:HNR1) Earnings Over The Next Year?

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Based on Hannover Rück SE's (FRA:HNR1) earnings update on 31 December 2018, analysts seem cautiously optimistic, as a 11% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 2.3%. By 2020, we can expect Hannover Rück’s bottom line to reach €1.2b, a jump from the current trailing-twelve-month of €1.1b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Hannover Rück in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

Check out our latest analysis for Hannover Rück

What can we expect from Hannover Rück in the longer term?

The longer term view from the 16 analysts covering HNR1 is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of HNR1's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

DB:HNR1 Past and Future Earnings, March 27th 2019
DB:HNR1 Past and Future Earnings, March 27th 2019

From the current net income level of €1.1b and the final forecast of €1.3b by 2022, the annual rate of growth for HNR1’s earnings is 6.1%. EPS reaches €10.56 in the final year of forecast compared to the current €8.79 EPS today. Margins are currently sitting at 5.6%, which is expected to expand to 5.9% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Hannover Rück, there are three relevant aspects 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 Hannover Rück 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 Hannover Rück is currently mispriced by the market.

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