U.S. Markets closed

What Should We Expect From Schneider Electric S.E.'s (EPA:SU) Earnings In The Years Ahead?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

The latest earnings announcement Schneider Electric S.E. (EPA:SU) released in December 2018 suggested that the business benefited from a small tailwind, eventuating to a single-digit earnings growth of 5.0%. Investors may find it useful to understand how market analysts predict Schneider Electric's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

View our latest analysis for Schneider Electric

Market analysts' prospects for the coming year seems positive, with earnings climbing by a robust 11%. This growth seems to continue into the following year with rates reaching double digit 20% compared to today’s earnings, and finally hitting €3.0b by 2022.

ENXTPA:SU Past and Future Earnings, June 13th 2019

Although it is useful to understand the growth year by year relative to today’s figure, it may be more insightful estimating the rate at which the company is growing every year, on average. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of Schneider Electric'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 8.4%. This means that, we can anticipate Schneider Electric will grow its earnings by 8.4% every year for the next couple of years.

Next Steps:

For Schneider Electric, I've compiled three key factors 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 SU 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 SU is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SU? 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.