What Do Analysts Think About The Future Of NH Hotel Group SA’s (BME:NHH)?

After NH Hotel Group SA’s (BME:NHH) earnings announcement in March 2018, it seems that analyst expectations are fairly bearish, with earnings expected to grow by 12.66% in the upcoming year relative to the higher past 5-year average growth rate of 39.24%. Presently, with latest-twelve-month earnings at €82.07m, we should see this growing to €92.46m by 2019. Below is a brief commentary on the longer term outlook the market has for NH Hotel Group. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for NH Hotel Group

Exciting times ahead?

The view from 17 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for NHH, 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.
BME:NHH Future Profit July 26th 18
BME:NHH Future Profit July 26th 18
From the current net income level of €35.77m and the final forecast of €65.31m by 2021, the annual rate of growth for NHH’s earnings is 18.74%. This leads to an EPS of €0.39 in the final year of projections relative to the current EPS of €0.10. The bottom-line growth seems to be caused by cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. With a current profit margin of 2.31%, this movement will result in a margin of 3.60% by 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For NH Hotel Group, I’ve put together three pertinent factors you should further research:

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

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.