After Barco NV's (EBR:BAR) earnings announcement in December 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 23% in the upcoming year relative to the past 5-year average growth rate of 11%. With trailing-twelve-month net income at current levels of €75m, we should see this rise to €92m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
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Can we expect Barco to keep growing?
Over the next three years, it seems the consensus view of the 4 analysts covering BAR is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of BAR's earnings growth over these next few years.
From the current net income level of €75m and the final forecast of €124m by 2022, the annual rate of growth for BAR’s earnings is 14%. This leads to an EPS of €10.01 in the final year of projections relative to the current EPS of €6.03. Margins are currently sitting at 7.3%, which is expected to expand to 10% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Barco, I've put together three pertinent factors you should further research:
- 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 Barco 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 Barco is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Barco? 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.