What Are Analysts Saying About Helvetia Holding AG’s (VTX:HELN) Long Term Outlook?

In March 2019, Helvetia Holding AG (VTX:HELN) announced its latest earnings update, which showed that the business benefited from a small tailwind, eventuating to a single-digit earnings growth of 7.0%. Below, I’ve presented key growth figures on how market analysts perceive Helvetia Holding’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

See our latest analysis for Helvetia Holding

Analysts’ expectations for the coming year seems optimistic, with earnings expanding by a robust 22%. This growth seems to continue into the following year with rates arriving at double digit 26% compared to today’s earnings, and finally hitting CHF552m by 2022.

SWX:HELN Past and Future Earnings, July 25th 2019
SWX:HELN Past and Future Earnings, July 25th 2019

Even though it is informative knowing the growth rate year by year relative to today’s figure, it may be more valuable analyzing the rate at which the business is growing on average every year. The advantage of this method is that it ignores near term flucuations and accounts for the overarching direction of Helvetia Holding’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 9.2%. This means that, we can assume Helvetia Holding will grow its earnings by 9.2% every year for the next few years.

Next Steps:

For Helvetia Holding, I’ve compiled three pertinent factors you should further research:

  1. 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.
  2. Valuation: What is HELN 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 HELN is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HELN? 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.