Will Kering SA’s (EPA:KER) Earnings Grow In The Next 12 Months?

In December 2018, Kering SA (EPA:KER) released its earnings update. Generally, the consensus outlook from analysts appear fairly confident, with earnings growth rate expected to be 23% in the upcoming year, relative to the past five-year average earnings growth of 25% per year. By 2020, we can expect Kering’s bottom line to reach €3.2b, a jump from the current trailing-twelve-month of €2.6b. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

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See our latest analysis for Kering

How will Kering perform in the near future?

Over the next three years, it seems the consensus view of the 21 analysts covering KER is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for KER, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

ENXTPA:KER Past and Future Earnings, May 24th 2019
ENXTPA:KER Past and Future Earnings, May 24th 2019

By 2022, KER’s earnings should reach €4.0b, from current levels of €2.6b, resulting in an annual growth rate of 14%. This leads to an EPS of €31.81 in the final year of projections relative to the current EPS of €20.8. In 2022, KER’s profit margin will have expanded from 19% to 22%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Kering, I’ve compiled three key aspects you should further examine:

  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 Kering 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 Kering is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kering? 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 editorial-team@simplywallst.com. 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.