What Should We Expect From Aperam S.A.’s (AMS:APAM) Earnings In The Next Couple Of Years?

The latest earnings announcement Aperam S.A. (AMS:APAM) released in December 2018 showed that the business faced a major headwind with earnings deteriorating by -11%. Below is a brief commentary on my key takeaways on how market analysts predict Aperam’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.

View our latest analysis for Aperam

Analysts’ expectations for the coming year seems pessimistic, with earnings falling by a double-digit -16%. However, the next few years show a contrast, with earnings growth becoming positive in 2021, with the bottom line increasing to €344m in 2022.

ENXTAM:APAM Past and Future Earnings, April 2nd 2019
ENXTAM:APAM Past and Future Earnings, April 2nd 2019

Although it’s helpful to understand the growth rate each year relative to today’s figure, it may be more valuable gauging the rate at which the earnings are rising or falling every year, on average. The benefit of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Aperam’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve appended 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 3.5%. This means, we can presume Aperam will grow its earnings by 3.5% every year for the next couple of years.

Next Steps:

For Aperam, I’ve compiled three essential aspects you should look at:

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