COFACE SA (EPA:COFA): Should The Future Outlook Worry You?

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Looking at COFACE SA’s (EPA:COFA) earnings update in March 2019, analyst consensus outlook appear pessimistic, with earnings expected to decline by 0.3% in the upcoming year. However, this is still an improvement on its past 5-year earnings growth rate of -5.8%, on average. Presently, with latest-twelve-month earnings at €122m, we should see this fall to €122m by 2020. 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.

See our latest analysis for COFACE

How is COFACE going to perform in the near future?

Longer term expectations from the 5 analysts covering COFA’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for COFA, 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:COFA Past and Future Earnings, June 13th 2019
ENXTPA:COFA Past and Future Earnings, June 13th 2019

From the current net income level of €122m and the final forecast of €132m by 2022, the annual rate of growth for COFA’s earnings is 3.3%. This leads to an EPS of €0.92 in the final year of projections relative to the current EPS of €0.79. With a current profit margin of 8.6%, this movement will result in a margin of 8.8% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For COFACE, there are three key aspects you should further research:

  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 COFACE 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 COFACE is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of COFACE? 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.