Should Unibel SA.’s (EPA:UNBL) Recent Earnings Decline Worry You?
Understanding how Unibel SA. (ENXTPA:UNBL) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Unibel is doing by comparing its latest earnings with its long-term trend as well as the performance of its food industry peers. See our latest analysis for Unibel
How Did UNBL’s Recent Performance Stack Up Against Its Past?
I like to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend allows me to examine different stocks on a similar basis, using new information. For Unibel, its latest trailing-twelve-month earnings is €116.18M, which, relative to the prior year’s level, has dropped by -11.12%. Given that these figures may be somewhat nearsighted, I’ve estimated an annualized five-year value for UNBL’s earnings, which stands at €91.52M This means that though earnings declined against last year, over the long run, Unibel’s profits have been growing on average.
What’s enabled this growth? Let’s take a look at if it is merely attributable to industry tailwinds, or if Unibel has experienced some company-specific growth. In the past couple of years, Unibel expanded its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Eyeballing growth from a sector-level, the FR food industry has been growing its average earnings by double-digit 11.53% over the past twelve months, and 10.57% over the last five years. This shows that any tailwind the industry is profiting from, Unibel has not been able to gain as much as its average peer.
What does this mean?
Unibel’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors affecting its business. You should continue to research Unibel to get a more holistic view of the stock by looking at:
1. Financial Health: Is UNBL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
2. Valuation: What is UNBL 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 UNBL is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.
