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L’Air Liquide S.A. (EPA:AI): What Does The Future Look Like?

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L’Air Liquide S.A.’s (EPA:AI) most recent earnings update in December 2018 confirmed that the business faced a slight headwind with earnings declining from €2.2b to €2.1b, a change of -5.5%. Below, I’ve laid out key numbers on how market analysts perceive L’Air Liquide S.A’s earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

See our latest analysis for L’Air Liquide S.A

Market analysts’ consensus outlook for this coming year seems positive, with earnings expanding by a robust 11%. This growth seems to continue into the following year with rates arriving at double digit 23% compared to today’s earnings, and finally hitting €2.8b by 2022.

ENXTPA:AI Past and Future Earnings, March 26th 2019
ENXTPA:AI Past and Future Earnings, March 26th 2019

Although it’s useful to understand the growth rate each year relative to today’s level, it may be more insightful to evaluate the rate at which the company is moving every year, on average. The advantage of this method is that we can get a better picture of the direction of L’Air Liquide S.A’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 10%. This means, we can anticipate L’Air Liquide S.A will grow its earnings by 10% every year for the next couple of years.

Next Steps:

For L’Air Liquide S.A, I’ve compiled three fundamental factors you should look at:

  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 AI 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 AI is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AI? 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.