Prada S.p.A. (HKG:1913): Will The Growth Last?
After Prada S.p.A.'s (HKG:1913) earnings announcement in December 2018, it seems that analyst forecasts are fairly optimistic, as a 43% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of -24%. By 2020, we can expect Prada’s bottom line to reach €295m, a jump from the current trailing-twelve-month of €205m. Below is a brief commentary around Prada's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for Prada
How will Prada perform in the near future?
The longer term expectations from the 24 analysts of 1913 is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for 1913, 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.
By 2022, 1913's earnings should reach €330m, from current levels of €205m, resulting in an annual growth rate of 14%. This leads to an EPS of €0.13 in the final year of projections relative to the current EPS of €0.080. In 2022, 1913's profit margin will have expanded from 6.5% to 9.0%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Prada, there are three essential factors you should further research:
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 Prada 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 Prada is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Prada? 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.
