Looking at Heineken NV’s (AMS:HEIA) earnings update in June 2018, analysts seem fairly confident, with profits predicted to increase by 5.6% next year against the past 5-year average growth rate of 0.3%. Presently, with latest-twelve-month earnings at €2.01b, we should see this growing to €2.13b by 2019. Below is a brief commentary on the longer term outlook the market has for Heineken. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from Heineken in the longer term?
The longer term expectations from the 26 analysts of HEIA is tilted 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 HEIA, 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 9.8% based on the most recent earnings level of €1.94b to the final forecast of €2.53b by 2021. This leads to an EPS of €5.01 in the final year of projections relative to the current EPS of €3.39. Growth in earnings appears to be a result of reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 8.8%, which is expected to expand to 10.3% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For Heineken, 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 Heineken 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 Heineken is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Heineken? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.