Vidrala, S.A. (BME:VID): Is It A Smart Long Term Opportunity?

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In December 2018, Vidrala, S.A. (BME:VID) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, as a 11% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 17%. Currently with trailing-twelve-month earnings of €116m, we can expect this to reach €129m by 2020. Below is a brief commentary around Vidrala’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

See our latest analysis for Vidrala

What can we expect from Vidrala in the longer term?

Longer term expectations from the 6 analysts covering VID’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of VID’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

BME:VID Past and Future Earnings, June 3rd 2019
BME:VID Past and Future Earnings, June 3rd 2019

This results in an annual growth rate of 7.0% based on the most recent earnings level of €116m to the final forecast of €142m by 2022. This leads to an EPS of €5.6 in the final year of projections relative to the current EPS of €4.47. With a current profit margin of 12%, this movement will result in a margin of 14% by 2022.

Next Steps:

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