Wüstenrot & Württembergische AG (ETR:WUW): Immense Growth Potential?

Based on Wüstenrot & Württembergische AG’s (ETR:WUW) earnings update in December 2018, analysts seem cautiously optimistic, as a 13% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 4.7%. Presently, with latest-twelve-month earnings at €214m, we should see this growing to €242m by 2020. 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.

View our latest analysis for Wüstenrot & Württembergische

Can we expect Wüstenrot & Württembergische to keep growing?

The longer term expectations from the 3 analysts of WUW 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. 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 WUW’s earnings growth over these next few years.

XTRA:WUW Past and Future Earnings, April 24th 2019
XTRA:WUW Past and Future Earnings, April 24th 2019

This results in an annual growth rate of 3.7% based on the most recent earnings level of €214m to the final forecast of €260m by 2022. This leads to an EPS of €2.67 in the final year of projections relative to the current EPS of €2.29. With a current profit margin of 3.4%, this movement will result in a margin of 4.8% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Wüstenrot & Württembergische, I’ve compiled three essential factors 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 Wüstenrot & Württembergische 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 Wüstenrot & Württembergische is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Wüstenrot & Württembergische? 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.