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What Do Investors Need To Know About Subsea 7 SA.'s (OB:SUBC) Earnings Trajectory?
Market analysts' consensus outlook for this coming year seems pessimistic, with earnings decreasing by a double-digit -51.49%. Over the medium term, earnings are expected to continue to be below today's level, with a decline of -51.01% in 2020, eventually reaching US$222.82M in 2021.
While it’s informative knowing the growth year by year relative to today’s level, it may be more valuable estimating the rate at which the earnings are growing on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Subsea 7's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -17.77%. This means, we can expect Subsea 7 will chip away at a rate of -17.77% every year for the next few years.
Next Steps:
For Subsea 7, I've put together three essential aspects 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 SUBC 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 SUBC is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SUBC? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
About OB:SUBC
Subsea 7
Subsea 7 S.A. delivers offshore projects and services for the energy industry worldwide.
Solid track record with excellent balance sheet.
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