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What Should You Know About Fresenius Medical Care AG & Co. KGaA's (ETR:FME) Growth?

Simply Wall St

Looking at Fresenius Medical Care AG & Co. KGaA's (ETR:FME) earnings update on 30 June 2019, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 4.0% in the upcoming year relative to the higher past 5-year average growth rate of 17%. By 2020, we can expect Fresenius Medical Care KGaA’s bottom line to reach €2.1b, a jump from the current trailing-twelve-month of €2.0b. Below is a brief commentary around Fresenius Medical Care KGaA's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for Fresenius Medical Care KGaA

Can we expect Fresenius Medical Care KGaA to keep growing?

Longer term expectations from the 21 analysts covering FME’s stock 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 get an idea of the overall earnings growth trend for FME, 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.

XTRA:FME Past and Future Earnings, August 1st 2019

By 2022, FME's earnings should reach €2.7b, from current levels of €2.0b, resulting in an annual growth rate of 12%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of €5.66 in the final year of forecast compared to the current €6.47 EPS today. With a current profit margin of 12%, this movement will result in a margin of 13% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Fresenius Medical Care KGaA, there are three relevant aspects you should further research:

  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 Fresenius Medical Care KGaA 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 Fresenius Medical Care KGaA is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fresenius Medical Care KGaA? 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.