What Should Investors Know About Evonik Industries AG's (ETR:EVK) Future?

On 30 June 2019, Evonik Industries AG (ETR:EVK) released its most recent earnings update. Generally, analyst forecasts seem bearish, with earnings expected to decline by 5.5% in the upcoming year relative to the past 5-year average growth rate of 5.3%. Presently, with latest-twelve-month earnings at €930m, we should see this fall to €879m by 2020. Below is a brief commentary on the longer term outlook the market has for Evonik Industries. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

Check out our latest analysis for Evonik Industries

How will Evonik Industries perform in the near future?

The 18 analysts covering EVK view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for EVK, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

This results in an annual growth rate of 5.5% based on the most recent earnings level of €930m to the final forecast of €1.0b by 2022. EPS reaches €2.02 in the final year of forecast compared to the current €2 EPS today. Margins are currently sitting at 6.2%, which is expected to expand to 6.8% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Evonik Industries, I've put together three key 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 Evonik Industries 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 Evonik Industries is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Evonik Industries? 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.