Looking at Securitas AB's (STO:SECU B) earnings update on 30 June 2019, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 17% next year against the past 5-year average growth rate of 8.8%. With trailing-twelve-month net income at current levels of kr3.0b, we should see this rise to kr3.5b in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
The longer term expectations from the 16 analysts of SECU B is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for SECU B, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 9.5% based on the most recent earnings level of kr3.0b to the final forecast of kr4.1b by 2022. This leads to an EPS of SEK11.13 in the final year of projections relative to the current EPS of SEK8.26. With a current profit margin of 3.0%, this movement will result in a margin of 3.5% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Securitas, there are three pertinent factors 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 Securitas 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 Securitas is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Securitas? 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.