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The most recent earnings update DEMIRE Deutsche Mittelstand Real Estate AG’s (ETR:DMRE) released in December 2018 revealed that the company benefited from a substantial tailwind, more than doubling its earnings from the prior year. Below is a brief commentary on my key takeaways on how market analysts view DEMIRE Deutsche Mittelstand Real Estate’s earnings growth outlook over the next few 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.
Analysts’ outlook for next year seems rather subdued, with earnings rising by a single digit 9.8%. However, the following year seems to show a contrast, with earnings decreasing by -23%. This volatility continues into the final year of forecast, with earnings generating €65m.
Even though it’s helpful to understand the growth rate year by year relative to today’s value, it may be more insightful estimating the rate at which the business is growing every year, on average. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of DEMIRE Deutsche Mittelstand Real Estate’s earnings trajectory over time, fluctuate up and down. 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 -3.6%. This means, we can assume DEMIRE Deutsche Mittelstand Real Estate will chip away at a rate of -3.6% every year for the next few years.
For DEMIRE Deutsche Mittelstand Real Estate, there are three pertinent factors you should further examine:
- 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.
- Future Earnings: How does DMRE’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DMRE? 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 firstname.lastname@example.org. 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.