Based on Valmet Oyj’s (HEL:VALMT) earnings update in December 2018, analysts seem fairly confident, with earnings expected to grow by 29% in the upcoming year, though this is evidently lower than the past 5-year average earnings growth of 44%. Currently with trailing-twelve-month earnings of €151m, we can expect this to reach €195m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Valmet Oyj in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Can we expect Valmet Oyj to keep growing?
The view from 8 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, VALMT’s earnings should reach €223m, from current levels of €151m, resulting in an annual growth rate of 9.7%. EPS reaches €1.49 in the final year of forecast compared to the current €1.01 EPS today. Margins are currently sitting at 4.5%, which is expected to expand to 5.9% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Valmet Oyj, I’ve put together three relevant 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.
- Valuation: What is Valmet Oyj 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 Valmet Oyj is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Valmet Oyj? 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.