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Jerónimo Martins, SGPS, S.A. (ELI:JMT): Immense Growth Potential?

Simply Wall St

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Looking at Jerónimo Martins, SGPS, S.A.'s (ELI:JMT) earnings update in December 2018, analyst forecasts seem in-line with historical trends, with earnings growth rate expected to be 5.4% in the upcoming year, relative to the past five-year average earnings growth of 6.0% per year. With trailing-twelve-month net income at current levels of €401m, we should see this rise to €423m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Jerónimo Martins SGPS in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for Jerónimo Martins SGPS

Can we expect Jerónimo Martins SGPS to keep growing?

The view from 21 analysts over the next three years is one of 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.

ENXTLS:JMT Past and Future Earnings, May 2nd 2019

From the current net income level of €401m and the final forecast of €518m by 2022, the annual rate of growth for JMT’s earnings is 8.1%. This leads to an EPS of €0.83 in the final year of projections relative to the current EPS of €0.64. In 2022, JMT's profit margin will have expanded from 2.3% to 2.5%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Jerónimo Martins SGPS, I've compiled three essential aspects 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 Jerónimo Martins SGPS 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 Jerónimo Martins SGPS is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Jerónimo Martins SGPS? 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.