MLP SE (FRA:MLP): Is It A Good Long Term Opportunity?

MLP SE’s (DB:MLP) most recent earnings update in December 2017 signalled that the company benefited from a strong tailwind, leading to a high double-digit earnings growth of 89.14%. Below, I’ve presented key growth figures on how market analysts predict MLP’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. View our latest analysis for MLP

Market analysts’ consensus outlook for the coming year seems optimistic, with earnings growing by a robust 26.47%. This growth seems to continue into the following year with rates reaching double digit 36.38% compared to today’s earnings, and finally hitting €42.44M by 2021.

DB:MLP Future Profit Apr 11th 18
DB:MLP Future Profit Apr 11th 18

Although it’s helpful to understand the growth each year relative to today’s level, it may be more beneficial to analyze the rate at which the business is rising or falling on average every year. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of MLP’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put 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 11.06%. This means, we can presume MLP will grow its earnings by 11.06% every year for the next couple of years.

Next Steps:

For MLP, I’ve put together three fundamental aspects 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 MLP 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 MLP is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MLP? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!