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In September 2018, Société BIC SA (EPA:BB) announced its earnings update. Overall, the consensus outlook from analysts appear fairly confident, as a 2.0% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 0.6%. With trailing-twelve-month net income at current levels of €295m, we should see this rise to €301m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Société BIC perform in the near future?
Over the next three years, it seems the consensus view of the 8 analysts covering BB is skewed towards the 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.
By 2022, BB’s earnings should reach €334m, from current levels of €295m, resulting in an annual growth rate of 8.9%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of €5.69 in the final year of forecast compared to the current €6.35 EPS today. With a current profit margin of 15%, this movement will result in a margin of 16% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Société BIC, I’ve compiled 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 Société BIC 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 Société BIC is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Société BIC? 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 firstname.lastname@example.org.