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What Should You Know About Fiat Chrysler Automobiles N.V.'s (BIT:FCA) Growth?

Simply Wall St

In March 2019, Fiat Chrysler Automobiles N.V. (BIT:FCA) released its earnings update. Generally, analysts seem extremely confident, as a 56% rise in profits is expected in the upcoming year, against the previous 5-year average growth rate of 42%. With trailing-twelve-month net income at current levels of €3.3b, we should see this rise to €5.2b in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for Fiat Chrysler Automobiles

Can we expect Fiat Chrysler Automobiles to keep growing?

The longer term expectations from the 23 analysts of FCA is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for FCA, 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.

BIT:FCA Past and Future Earnings, July 31st 2019

This results in an annual growth rate of 5.7% based on the most recent earnings level of €3.3b to the final forecast of €5.8b by 2022. This leads to an EPS of €2.74 in the final year of projections relative to the current EPS of €2.14. Margins are currently sitting at 3.0%, which is expected to expand to 4.9% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Fiat Chrysler Automobiles, there are three important aspects you should further examine:

  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 Fiat Chrysler Automobiles 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 Fiat Chrysler Automobiles is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fiat Chrysler Automobiles? 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.