Fortum Oyj (HEL:FORTUM): Earnings Growth Remains Elusive

In December 2017, Fortum Oyj (HLSE:FORTUM) announced its latest earnings update. Overall, analyst consensus outlook seem bearish, as a -7.90% fall in profits is expected in the upcoming year. However, this is still an improvement on its past 5-year earnings growth rate of -22.18%, on average. Presently, with earnings at €866.00M, we should see this fall to €797.55M by 2019. Below is a brief commentary on the longer term outlook the market has for Fortum Oyj. Investors wanting to learn more about other aspects of the company should research its fundamentals here. See our latest analysis for Fortum Oyj

How is Fortum Oyj going to perform in the near future?

The longer term view from the 21 analysts covering FORTUM 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 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 2021, FORTUM's earnings should reach €1.12B, from current levels of €866.00M, resulting in an annual growth rate of 8.20%. EPS reaches €1.26 in the final year of forecast compared to the current €0.97 EPS today. The primary reason for earnings growth is due to reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. In 2021, FORTUM's profit margin will have expanded from 18.96% to 22.02%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Fortum Oyj, I've compiled three pertinent 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 Fortum 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 Fortum Oyj is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fortum 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!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.