Based on Leasinvest Real Estate SCA’s (EBR:LEAS) earnings update in June 2018, analyst forecasts appear to be pessimistic, with earnings expected to decline by -12% in the upcoming year against the past 5-year average growth rate of 11%. Currently with a railing-twelve-month profit of €48m, the consensus growth rate suggests that earnings will drop to €42m by 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Leasinvest Real Estate to keep growing?
The longer term expectations from the 2 analysts of LEAS is tilted towards the 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.
This results in an annual growth rate of 4.7% based on the most recent earnings level of €48m to the final forecast of €53m by 2021. This leads to an EPS of €9.65 in the final year of projections relative to the current EPS of €9.63. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 88% to 80% by the end of 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For Leasinvest Real Estate, I’ve put together three fundamental 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 Leasinvest Real Estate 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 Leasinvest Real Estate is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Leasinvest Real Estate? 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.