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The most recent earnings release Gecina SA's (EPA:GFC) announced in February 2019 signalled that the company experienced a significant headwind with earnings falling by -47%. Below is a brief commentary on my key takeaways on how market analysts view Gecina's earnings growth outlook over the next few 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' expectations for this coming year seems pessimistic, with earnings decreasing by a double-digit -22%. Beyond this, earnings are expected to continue to be below today's level, with a decline of -29% in 2021, eventually reaching €709m in 2022.
Although it is useful to understand the growth each year relative to today’s value, it may be more beneficial determining the rate at which the earnings are growing on average every year. The benefit of this method is that we can get a better picture of the direction of Gecina's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. 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 -8.3%. This means, we can assume Gecina will chip away at a rate of -8.3% every year for the next few years.
For Gecina, I've put together three essential 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 GFC 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 GFC is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GFC? 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.
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