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Titanium Oyj (HEL:TITAN): Earnings Growth Remains Elusive

Simply Wall St

In December 2018, Titanium Oyj (HEL:TITAN) released its earnings update. Generally, analyst forecasts appear to be pessimistic, with profits predicted to drop by 18% next year relative to the past 5-year average growth rate of 46%. Presently, with latest-twelve-month earnings at €6.1m, we should see this fall to €5.0m by 2020. Below is a brief commentary on the longer term outlook the market has for Titanium Oyj. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for Titanium Oyj

How will Titanium Oyj perform in the near future?

The 1 analysts covering TITAN view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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.

HLSE:TITAN Past and Future Earnings, August 19th 2019

This results in an annual growth rate of 9.0% based on the most recent earnings level of €6.1m to the final forecast of €7.2m by 2022. EPS reaches €0.72 in the final year of forecast compared to the current €0.66 EPS today. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 37% to 33% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Titanium Oyj, I've put together three key factors you should look at:

  1. Valuation: What is Titanium Oyj 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 Titanium Oyj is currently mispriced by the market.
  2. Future Earnings: How does Titanium Oyj's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Titanium Oyj? 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.