What Should You Know About Trigano S.A.'s (EPA:TRI) Earnings Trajectory?
The most recent earnings release Trigano S.A.'s (EPA:TRI) announced in August 2018 signalled that the business benefited from a strong tailwind, eventuating to a double-digit earnings growth of 47%. Below is my commentary, albeit very simple and high-level, on how market analysts view Trigano's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Trigano
Market analysts' prospects for this coming year seems pessimistic, with earnings decreasing by -2.0%. But in the following year, there is a complete contrast in performance, with arriving at double digit 3.4% compared to today’s level and continues to increase to €198m in 2022.
Even though it’s informative knowing the rate of growth year by year relative to today’s level, it may be more beneficial evaluating the rate at which the earnings are growing on average every year. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Trigano's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 2.0%. This means, we can presume Trigano will grow its earnings by 2.0% every year for the next few years.
Next Steps:
For Trigano, I've compiled three key factors 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 TRI 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 TRI is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TRI? 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.
