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Since Aker Solutions ASA (OB:AKSO) released its earnings in March 2019, it seems that analyst forecasts are fairly bearish, with profits predicted to drop by 2.9% next year. Though compared to its 5-year track record of the average earnings growth rate of -39%, this is still an improvement. Presently, with latest-twelve-month earnings at øre511m, we should see this fall to øre496m by 2020. Below is a brief commentary around Aker Solutions’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
What can we expect from Aker Solutions in the longer term?
The longer term view from the 13 analysts covering AKSO is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of AKSO’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 18% based on the most recent earnings level of øre511m to the final forecast of øre830m by 2022. This leads to an EPS of NOK3.27 in the final year of projections relative to the current EPS of NOK1.88. Margins are currently sitting at 2.0%, which is expected to expand to 2.8% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Aker Solutions, there are three pertinent aspects 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 Aker Solutions 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 Aker Solutions is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Aker Solutions? 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 email@example.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.