After ForFarmers N.V.'s (AMS:FFARM) earnings announcement on 30 June 2019, analysts seem fairly confident, with profits predicted to increase by 48% next year against the past 5-year average growth rate of 3.9%. Presently, with latest-twelve-month earnings at €59m, we should see this growing to €87m by 2020. Below is a brief commentary on the longer term outlook the market has for ForFarmers. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect ForFarmers to keep growing?
Longer term expectations from the 3 analysts covering FFARM’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 reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of €59m and the final forecast of €116m by 2022, the annual rate of growth for FFARM’s earnings is 14%. EPS reaches €0.62 in the final year of forecast compared to the current €0.58 EPS today. Margins are currently sitting at 2.4%, which is expected to expand to 4.6% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For ForFarmers, I've compiled three key aspects 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 ForFarmers 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 ForFarmers is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ForFarmers? 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 email@example.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.