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After Bouygues SA’s (EPA:EN) recent earnings announcement in September 2018, it seems that analyst forecasts are fairly bearish, with profits predicted to drop by -10% next year relative to the past 5-year average growth rate of 45%. Currently with a trailing-twelve-month profit of €1.1b, the consensus growth rate suggests that earnings will drop to €976m by 2020. Below is a brief commentary around Bouygues’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Bouygues perform in the near future?
Over the next three years, it seems the consensus view of the 17 analysts covering EN 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 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.
By 2022, EN’s earnings should reach €1.1b, from current levels of €1.1b, resulting in an annual growth rate of 5.0%. EPS reaches €3.21 in the final year of forecast compared to the current €3.03 EPS today. However, the expansion of the current 3.3% margin is not expected to be sustained, as it begins to contract to 3.1% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Bouygues, there are three key aspects you should look at:
- 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 Bouygues 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 Bouygues is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Bouygues? 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 firstname.lastname@example.org. 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.