After Telia Company AB (publ)'s (STO:TELIA) earnings announcement on 31 March 2019, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 13% in the upcoming year relative to the past 5-year average growth rate of -4.2%. By 2020, we can expect Telia Company’s bottom line to reach kr11b, a jump from the current trailing-twelve-month of kr9.6b. Below is a brief commentary on the longer term outlook the market has for Telia Company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
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Exciting times ahead?
Over the next three years, it seems the consensus view of the 19 analysts covering TELIA 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 get an idea of the overall earnings growth trend for TELIA, 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.
This results in an annual growth rate of 5.8% based on the most recent earnings level of kr9.6b to the final forecast of kr12b by 2022. This leads to an EPS of SEK2.95 in the final year of projections relative to the current EPS of SEK2.23. Margins are currently sitting at 11%, which is expected to expand to 14% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Telia Company, there are three relevant 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 Telia Company 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 Telia Company is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Telia Company? 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.