NORMA Group SE (FRA:NOEJ): Will The Growth Last?

Based on NORMA Group SE's (FRA:NOEJ) earnings update on 31 December 2018, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 0.7% next year compared with the higher past 5-year average growth rate of 17%. Presently, with latest-twelve-month earnings at €92m, we should see this growing to €92m by 2020. Below is a brief commentary on the longer term outlook the market has for NORMA Group. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for NORMA Group

What can we expect from NORMA Group in the longer term?

Over the next three years, it seems the consensus view of the 15 analysts covering NOEJ is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of NOEJ's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

From the current net income level of €92m and the final forecast of €119m by 2022, the annual rate of growth for NOEJ’s earnings is 8.3%. This leads to an EPS of €3.73 in the final year of projections relative to the current EPS of €2.88. Margins are currently sitting at 8.4%, which is expected to expand to 9.8% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For NORMA Group, I've put together three relevant aspects you should further examine:

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 NORMA Group 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 NORMA Group is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of NORMA Group? 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.