As Terna – Rete Elettrica Nazionale Società per Azioni (BIT:TRN) announced its earnings release on 31 March 2019, analyst forecasts seem fairly subdued, with earnings expected to grow by 4.6% in the upcoming year relative to the higher past 5-year average growth rate of 7.0%. Currently with trailing-twelve-month earnings of €707m, we can expect this to reach €739m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
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What can we expect from Terna – Rete Elettrica Nazionale Società per Azioni in the longer term?
Over the next three years, it seems the consensus view of the 16 analysts covering TRN is skewed towards the 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 TRN, 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.
By 2022, TRN’s earnings should reach €780m, from current levels of €707m, resulting in an annual growth rate of 3.1%. This leads to an EPS of €0.39 in the final year of projections relative to the current EPS of €0.35. This initial high-growth revenue squeezes TRN’s margins. However, analysts are expecting earnings growth to catch up, and current margins of 31% to expand to 32% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Terna – Rete Elettrica Nazionale Società per Azioni, I’ve compiled three fundamental factors 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 Terna – Rete Elettrica Nazionale Società per Azioni 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 Terna – Rete Elettrica Nazionale Società per Azioni is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Terna – Rete Elettrica Nazionale Società per Azioni? 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.