What Should Investors Know About Konecranes Plc’s (HEL:KCR) Future?

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The latest earnings announcement Konecranes Plc (HEL:KCR) released in December 2018 indicated that the company faced a substantial headwind with earnings falling by -56%. Below is a brief commentary on my key takeaways on how market analysts predict Konecranes’s earnings growth outlook over the next couple of 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.

See our latest analysis for Konecranes

Market analysts’ prospects for the upcoming year seems buoyant, with earnings rising by a significant 70%. Earnings are predicted to shoot up to around €225m in the following year before plateauing, heading into 2022.

HLSE:KCR Future Profit February 9th 19
HLSE:KCR Future Profit February 9th 19

Although it is useful to understand the growth year by year relative to today’s figure, it may be more beneficial estimating the rate at which the company is moving on average every year. The benefit of this method is that we can get a better picture of the direction of Konecranes’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted 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 30%. This means that, we can anticipate Konecranes will grow its earnings by 30% every year for the next few years.

Next Steps:

For Konecranes, I’ve put together three important aspects 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 KCR 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 KCR is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of KCR? 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.