What Should We Expect From Allianz SE’s (FRA:ALV) Earnings In The Years Ahead?

The latest earnings update Allianz SE’s (DB:ALV) released in December 2017 revealed that the company endured a minor headwind with earnings falling from €6.96B to €6.80B, a change of -2.28%. Below, I’ve presented key growth figures on how market analysts perceive Allianz’s earnings growth trajectory over the next few years and whether the future looks brighter. 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 Allianz

Analysts’ expectations for next year seems rather muted, with earnings expanding by a single digit 9.51%. The growth outlook in the following year seems much more optimistic with rates arriving at double digit 13.41% compared to today’s earnings, and finally hitting €7.96B by 2021.

DB:ALV Future Profit Mar 29th 18
DB:ALV Future Profit Mar 29th 18

Even though it’s informative knowing the rate of growth year by year relative to today’s figure, it may be more valuable determining the rate at which the company is rising or falling every year, on average. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Allianz’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 5.17%. This means, we can assume Allianz will grow its earnings by 5.17% every year for the next couple of years.

Next Steps:

For Allianz, I’ve compiled three key factors you should look at:

  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 ALV 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 ALV is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ALV? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!