Since Crédit Agricole SA (EPA:ACA) released its earnings in June 2018, the consensus outlook from analysts appear fairly confident, as upcoming earnings growth is expected to be 25% next year, similar to the range of average earnings growth for the past five years of 24% per year. Currently with trailing-twelve-month earnings of €3.3b, we can expect this to reach €4.2b by 2019. 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.
How will Crédit Agricole perform in the near future?
The view from 18 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 7.4% based on the most recent earnings level of €3.2b to the final forecast of €4.7b by 2021. This leads to an EPS of €1.73 in the final year of projections relative to the current EPS of €1.12. Growth in the bottom line seems to suggest reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 18%, which is expected to expand to 23% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For Crédit Agricole, 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 Crédit Agricole 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 Crédit Agricole is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Crédit Agricole? 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 firstname.lastname@example.org.