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Fresenius SE & Co. KGaA (FRA:FRE): Immense Growth Potential?

Simply Wall St

Looking at Fresenius SE & Co. KGaA's (FRA:FRE) earnings update in December 2018, analyst forecasts seem fairly subdued, with earnings expected to grow by -7.2% in the upcoming year against the higher past 5-year average growth rate of 15%. By 2020, we can expect Fresenius SE KGaA’s bottom line to reach €1.9b, a jump from the current trailing-twelve-month of €2.0b. Below is a brief commentary on the longer term outlook the market has for Fresenius SE KGaA. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for Fresenius SE KGaA

How will Fresenius SE KGaA perform in the near future?

Over the next three years, it seems the consensus view of the 20 analysts covering FRE is skewed towards the 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 FRE'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.

DB:FRE Past and Future Earnings, April 26th 2019

By 2022, FRE's earnings should reach €2.2b, from current levels of €2.0b, resulting in an annual growth rate of 6.0%. EPS reaches €3.96 in the final year of forecast compared to the current €3.65 EPS today. However, the near term margins may change heading into 2022, from the current levels of 6.0% to 5.6%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Fresenius SE KGaA, I've put together three relevant factors 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 Fresenius SE KGaA 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 Fresenius SE KGaA is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fresenius SE KGaA? 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.