Jenoptik AG (ETR:JEN): Are Analysts Right About The Drop In Earnings?
Since Jenoptik AG (ETR:JEN) released its earnings in March 2018, it seems that analyst forecasts are fairly pessimistic, as a -1.90% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 10.57%. Currently with a railing-twelve-month profit of €79.58m, the consensus growth rate suggests that earnings will drop to €78.07m by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Jenoptik in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for Jenoptik
What can we expect from Jenoptik in the longer term?
The longer term expectations from the 10 analysts of JEN is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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.
This results in an annual growth rate of 8.72% based on the most recent earnings level of €72.30m to the final forecast of €87.33m by 2021. EPS reaches €1.66 in the final year of forecast compared to the current €1.26 EPS today. Growth in the bottom line seems to suggest cost cutting activities, as revenues is expected to grow much slower than earnings. However, the expansion of the current 9.67% margin is not expected to be sustained, as it begins to contract to 9.61% by the end of 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Jenoptik, I’ve compiled three essential 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 Jenoptik 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 Jenoptik is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Jenoptik? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
