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Mondi plc (LON:MNDI): Immense Growth Potential?

Simply Wall St

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After Mondi plc's (LON:MNDI) earnings announcement in December 2018, analyst forecasts seem fairly subdued, with earnings expected to grow by 6.6% in the upcoming year relative to the higher past 5-year average growth rate of 12%. Presently, with latest-twelve-month earnings at €824m, we should see this growing to €879m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Mondi in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for Mondi

Exciting times ahead?

The 11 analysts covering MNDI view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for MNDI, 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.

LSE:MNDI Past and Future Earnings, May 14th 2019

By 2022, MNDI's earnings should reach €921m, from current levels of €824m, resulting in an annual growth rate of 3.6%. EPS reaches €1.98 in the final year of forecast compared to the current €1.7 EPS today. Margins are currently sitting at 11%, which is expected to expand to 12% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Mondi, I've compiled three relevant factors 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 Mondi 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 Mondi is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Mondi? 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.