Looking at SEB SA’s (EPA:SK) earnings update on 31 December 2018, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 8.6% next year relative to the higher past 5-year average growth rate of 20%. Currently with trailing-twelve-month earnings of €419m, we can expect this to reach €455m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from SEB in the longer term?
The 9 analysts covering SK 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 SK’s earnings growth over these next few years.
By 2022, SK’s earnings should reach €546m, from current levels of €419m, resulting in an annual growth rate of 9.1%. This leads to an EPS of €11.21 in the final year of projections relative to the current EPS of €8.44. Margins are currently sitting at 6.2%, which is expected to expand to 6.7% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For SEB, there are three pertinent factors you should further examine:
- 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 SEB 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 SEB is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SEB? 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 email@example.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.