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What Should We Expect From Mapfre, S.A.’s (BME:MAP) Earnings In The Next Couple Of Years?

Simply Wall St

The most recent earnings update Mapfre, S.A.’s (BME:MAP) released in December 2018 confirmed that the company experienced a significant headwind with earnings falling by -25%. Below, I’ve presented key growth figures on how market analysts perceive Mapfre’s earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Mapfre

Market analysts’ prospects for next year seems positive, with earnings rising by a robust 40%. This growth seems to continue into the following year with rates reaching double digit 66% compared to today’s earnings, and finally hitting €932m by 2022.

BME:MAP Past and Future Earnings, March 11th 2019

Although it’s useful to be aware of the growth each year relative to today’s value, it may be more beneficial to determine the rate at which the business is rising or falling every year, on average. The advantage of this technique is that it ignores near term flucuations and accounts for the overarching direction of Mapfre’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 19%. This means, we can anticipate Mapfre will grow its earnings by 19% every year for the next couple of years.

Next Steps:

For Mapfre, there are 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 MAP 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 MAP is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MAP? 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.