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FNG NV (EBR:FNG): Poised For Long-Term Success?

Simply Wall St

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FNG NV's (EBR:FNG) latest earnings update in April 2019 signalled that the business gained from a strong tailwind, eventuating to a high double-digit earnings growth of 58%. Below is my commentary, albeit very simple and high-level, on how market analysts predict FNG's earnings growth trajectory over the next couple of 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.

See our latest analysis for FNG

Market analysts' prospects for this coming year seems buoyant, with earnings expanding by a significant 65%. This strong growth in earnings is expected to continue, bringing the bottom line up to €32m by 2022.

ENXTBR:FNG Past and Future Earnings, June 25th 2019

Although it’s informative knowing the growth rate each year relative to today’s level, it may be more beneficial to estimate the rate at which the business is growing every year, on average. The pro of this approach is that we can get a better picture of the direction of FNG's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put 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 28%. This means that, we can anticipate FNG will grow its earnings by 28% every year for the next couple of years.

Next Steps:

For FNG, there are three pertinent aspects you should look at:

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