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Proximus PLC's (EBR:PROX) latest earnings update in December 2018 revealed that the business endured a slight headwind with earnings declining from €522m to €508m, a change of -2.7%. Below is a brief commentary on my key takeaways on how market analysts predict Proximus's earnings growth trajectory over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts' outlook for the coming year seems rather muted, with earnings climbing by a single digit 3.2%. The following years do not look much more exciting, with earnings reaching €554m before falling in 2022.
Even though it is helpful to understand the growth each year relative to today’s value, it may be more beneficial estimating the rate at which the company is rising or falling on average every year. The benefit of this method is that we can get a bigger picture of the direction of Proximus's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 4.2%. This means that, we can anticipate Proximus will grow its earnings by 4.2% every year for the next couple of years.
For Proximus, I've put together three important 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 PROX 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 PROX is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of PROX? 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.