Based on Tenaris SA’s (BIT:TEN) earnings update in September 2018, analysts seem fairly confident, with profits predicted to increase by 26% next year relative to the past 5-year average growth rate of -35%. Currently with trailing-twelve-month earnings of US$453m, we can expect this to reach US$569m by 2019. Below is a brief commentary around Tenaris’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.
How is Tenaris going to perform in the near future?
Longer term expectations from the 26 analysts covering TEN’s stock is one of 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 TEN, 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.
From the current net income level of US$453m and the final forecast of US$924m by 2021, the annual rate of growth for TEN’s earnings is 21%. EPS reaches $1.27 in the final year of forecast compared to the current $0.38 EPS today. In 2021, TEN’s profit margin will have expanded from 8.6% to 12%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Tenaris, I’ve put together three important factors 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 Tenaris 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 Tenaris is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Tenaris? 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 email@example.com.