U.S. Markets closed

Will Motor Oil (Hellas) Corinth Refineries SA’s (ATH:MOH) Earnings Grow In The Year Ahead?

Cameron Brookes

Based on Motor Oil (Hellas) Corinth Refineries SA’s (ATH:MOH) earnings update in March 2018, analyst consensus outlook seem bearish, as a -3.8% fall in profits is expected in the upcoming year compared with the past 5-year average growth rate of 29.9%. With trailing-twelve-month net income at current levels of €265.9m, the consensus growth rate suggests that earnings will decline to €255.8m by 2019. Below is a brief commentary on the longer term outlook the market has for Motor Oil (Hellas) Corinth Refineries. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

See our latest analysis for Motor Oil (Hellas) Corinth Refineries

How is Motor Oil (Hellas) Corinth Refineries going to perform in the near future?

Over the next three years, it seems the consensus view of the 9 analysts covering MOH is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of MOH’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

ATSE:MOH Future Profit August 27th 18

This results in an annual growth rate of 4.9% based on the most recent earnings level of €315.2m to the final forecast of €352.3m by 2021. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of €2.67 in the final year of forecast compared to the current €2.85 EPS today. The main reason for growth is a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. In 2021, MOH’s profit margin will have expanded from 4.0% to 4.3%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Motor Oil (Hellas) Corinth Refineries, there are three key 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 Motor Oil (Hellas) Corinth Refineries 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 Motor Oil (Hellas) Corinth Refineries is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Motor Oil (Hellas) Corinth Refineries? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.