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Poste Italiane SpA (BIT:PST): Earnings Growth Remains Elusive

Veer Mallick

Since Poste Italiane SpA (BIT:PST) released its earnings in September 2018, analyst forecasts appear to be bearish, with profits predicted to drop by -1.9% next year compared with the past 5-year average growth rate of 0.3%. Currently with a railing-twelve-month profit of €689m, the consensus growth rate suggests that earnings will drop to €676m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Poste Italiane in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Poste Italiane

How will Poste Italiane perform in the near future?

The longer term view from the 7 analysts covering PST is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

BIT:PST Future Profit January 2nd 19

This results in an annual growth rate of 6.2% based on the most recent earnings level of €689m to the final forecast of €769m by 2022. This leads to an EPS of €0.85 in the final year of projections relative to the current EPS of €0.53. With a current profit margin of 2.1%, this movement will result in a margin of 6.2% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Poste Italiane, I’ve put together three fundamental aspects 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 Poste Italiane 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 Poste Italiane is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Poste Italiane? 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.