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In March 2019, Infineon Technologies AG (ETR:IFX) released its earnings update. Generally, analyst consensus outlook appear pessimistic, as a 2.2% fall in profits is expected in the upcoming year compared with the past 5-year average growth rate of 20%. With trailing-twelve-month net income at current levels of €1.2b, the consensus growth rate suggests that earnings will decline to €1.2b by 2020. Below is a brief commentary around Infineon Technologies's earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Infineon Technologies perform in the near future?
Longer term expectations from the 22 analysts covering IFX’s stock 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 IFX'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.
From the current net income level of €1.2b and the final forecast of €1.4b by 2022, the annual rate of growth for IFX’s earnings is 9.5%. This leads to an EPS of €1.09 in the final year of projections relative to the current EPS of €1.08. However, the near term margins may change heading into 2022, from the current levels of 16% to 15%.
Future outlook is only one aspect when you're building an investment case for a stock. For Infineon Technologies, I've put together three relevant factors you should further examine:
- 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.
- Valuation: What is Infineon Technologies 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 Infineon Technologies is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Infineon Technologies? 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 firstname.lastname@example.org. 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.