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Sampo Oyj’s (HEL:SAMPO) most recent earnings announcement in December 2018 showed that the business experienced a immense headwind with earnings declining by -24%. Below, I’ve presented key growth figures on how market analysts perceive Sampo Oyj’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts’ outlook for the upcoming year seems pessimistic, with earnings reducing by -5.5%. In the next couple of years, earnings are predicted to continue to be below today’s level, with a fall of -1.9% in 2021, eventually reaching €1.7b in 2022.
While it is helpful to understand the growth rate each year relative to today’s value, it may be more insightful estimating the rate at which the earnings are rising or falling every year, on average. The advantage of this method is that we can get a better picture of the direction of Sampo Oyj’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put 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 0.1%. This means, we can anticipate Sampo Oyj will grow its earnings by 0.1% every year for the next few years.
For Sampo Oyj, I’ve put together three fundamental aspects you should further research:
- 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 SAMPO 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 SAMPO is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SAMPO? 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 email@example.com.