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After Talanx AG’s (ETR:TLX) earnings announcement on 31 March 2019, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 35% next year compared with the past 5-year average growth rate of -0.8%. With trailing-twelve-month net income at current levels of €703m, we should see this rise to €950m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Can we expect Talanx to keep growing?
The longer term expectations from the 11 analysts of TLX is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of TLX’s earnings growth over these next few years.
By 2022, TLX’s earnings should reach €1.1b, from current levels of €703m, resulting in an annual growth rate of 9.3%. EPS reaches €4.44 in the final year of forecast compared to the current €2.78 EPS today. Margins are currently sitting at 2.1%, which is expected to expand to 3.4% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Talanx, there are three key factors you should look at:
- 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 Talanx 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 Talanx is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Talanx? 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 email@example.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.