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Schneider Electric S.E. (EPA:SU): Will The Growth Last?

Simply Wall St

On 30 June 2019, Schneider Electric S.E. (EPA:SU) released its earnings update. Generally, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 17% next year compared with the past 5-year average growth rate of 8.6%. Presently, with latest-twelve-month earnings at €2.4b, we should see this growing to €2.8b by 2020. Below is a brief commentary around Schneider Electric'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.

See our latest analysis for Schneider Electric

How will Schneider Electric perform in the near future?

The view from 18 analysts over the next three years is one of 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 SU, 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.

ENXTPA:SU Past and Future Earnings, August 23rd 2019

From the current net income level of €2.4b and the final forecast of €3.3b by 2022, the annual rate of growth for SU’s earnings is 9.4%. EPS reaches €5.89 in the final year of forecast compared to the current €4.25 EPS today. In 2022, SU's profit margin will have expanded from 9.2% to 11%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Schneider Electric, 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 Schneider Electric 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 Schneider Electric is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Schneider Electric? 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.