What Should Investors Know About Bertrandt Aktiengesellschaft’s (FRA:BDT) Earnings Outlook?

Bertrandt Aktiengesellschaft’s (FRA:BDT) announced its latest earnings update in September 2018, which revealed that the business experienced a slight tailwind, eventuating to a single-digit earnings growth of 8.0%. Today I want to provide a brief commentary on how market analysts perceive Bertrandt’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Bertrandt

Market analysts’ prospects for the upcoming year seems positive, with earnings growing by a robust 23%. This growth seems to continue into the following year with rates reaching double digit 41% compared to today’s earnings, and finally hitting €73m by 2022.

DB:BDT Future Profit January 27th 19
DB:BDT Future Profit January 27th 19

Even though it is helpful to be aware of the rate of growth each year relative to today’s figure, it may be more beneficial to determine the rate at which the business is moving on average every year. The advantage of this technique is that we can get a better picture of the direction of Bertrandt’s earnings trajectory over the long run, irrespective of near term fluctuations, 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 14%. This means that, we can anticipate Bertrandt will grow its earnings by 14% every year for the next couple of years.

Next Steps:

For Bertrandt, 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 BDT 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 BDT is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BDT? 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 editorial-team@simplywallst.com.