In December 2018, NN Group N.V. (AMS:NN) released its earnings update. Generally, analyst consensus outlook appear cautiously optimistic, as a 22% increase in profits is expected in the upcoming year, though this is noticeably lower than the past 5-year average earnings growth of 30%. With trailing-twelve-month net income at current levels of €1.1b, we should see this rise to €1.3b in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for NN Group in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Exciting times ahead?
The 9 analysts covering NN view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of NN's earnings growth over these next few years.
This results in an annual growth rate of 11% based on the most recent earnings level of €1.1b to the final forecast of €1.6b by 2022. This leads to an EPS of €4.66 in the final year of projections relative to the current EPS of €3.16. In 2022, NN's profit margin will have expanded from 5.4% to 11%.
Future outlook is only one aspect when you're building an investment case for a stock. For NN Group, I've put together three key aspects you should look at:
- 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 NN Group 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 NN Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of NN Group? 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 firstname.lastname@example.org. 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.