Jerónimo Martins, SGPS, S.A.’s (ELI:JMT) latest earnings announcement in December 2018 indicated that the company benefited from a small tailwind, eventuating to a single-digit earnings growth of 4.1%. Below, I’ve presented key growth figures on how market analysts view Jerónimo Martins SGPS’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts’ expectations for the upcoming year seems rather muted, with earnings climbing by a single digit 7.1%. The growth outlook in the following year seems much more optimistic with rates generating double digit 18% compared to today’s earnings, and finally hitting €518m by 2022.
Even though it is useful to be aware of the growth rate year by year relative to today’s value, it may be more beneficial to gauge the rate at which the business is rising or falling every year, on average. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Jerónimo Martins SGPS’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 8.0%. This means, we can presume Jerónimo Martins SGPS will grow its earnings by 8.0% every year for the next couple of years.
For Jerónimo Martins SGPS, I’ve compiled three fundamental aspects 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 JMT 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 JMT is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of JMT? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.