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L'Occitane International S.A. (HKG:973): What's The Analyst Consensus Outlook?

Simply Wall St

The latest earnings announcement L'Occitane International S.A. (HKG:973) released in July 2019 suggested that the company benefited from a strong tailwind, eventuating to a double-digit earnings growth of 23%. Today I want to provide a brief commentary on how market analysts view L'Occitane International's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for L'Occitane International

Analysts' outlook for next year seems positive, with earnings increasing by a robust 20%. This growth seems to continue into the following year with rates arriving at double digit 31% compared to today’s earnings, and finally hitting €168m by 2022.

SEHK:973 Past and Future Earnings, August 6th 2019

Although it is informative understanding the rate of growth each year relative to today’s figure, it may be more valuable determining the rate at which the earnings are growing on average every year. The benefit of this technique is that we can get a better picture of the direction of L'Occitane International'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 inserted 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 11%. This means, we can anticipate L'Occitane International will grow its earnings by 11% every year for the next few years.

Next Steps:

For L'Occitane International, I've compiled three important aspects 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 973 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 973 is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 973? 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.