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After Klépierre SA’s (EPA:LI) recent earnings announcement in December 2018, analyst consensus outlook appear pessimistic, with earnings expected to decline by -0.7% in the upcoming year against the past 5-year average growth rate of 28%. Presently, with latest-twelve-month earnings at €839m, we should see this fall to €833m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from Klépierre in the longer term?
Over the next three years, it seems the consensus view of the 10 analysts covering LI is skewed towards the negative sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for LI, 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.
This results in an annual growth rate of -9.5% based on the most recent earnings level of €839m to the final forecast of €658m by 2022. This leads to an EPS of €2.7 in the final year of projections relative to the current EPS of €2.8. The main reason for LI’s earnings contraction is revenue declining at an average annual rate of -0.3%. Furthermore, the current 61% margin is expected to contract to 50% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Klépierre, I’ve put together three relevant factors you should further examine:
- 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 Klépierre 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 Klépierre is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Klépierre? 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.