What Should We Expect From P/F Bakkafrost's (OB:BAKKA) Earnings In The Next 12 Months?

July 26, 2018

In March 2018, P/F Bakkafrost (OB:BAKKA) released its earnings update. Generally, the consensus outlook from analysts appear highly confident, with profits predicted to ramp up by an impressive 52.89% next year, relative to the previous 5-year average growth rate of 20.20%. Presently, with latest-twelve-month earnings at ø704.67m, we should see this growing to ø1.08b by 2019. Below is a brief commentary around P/F Bakkafrost's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

Check out our latest analysis for P/F Bakkafrost

Exciting times ahead?

Longer term expectations from the 8 analysts covering BAKKA’s stock 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 BAKKA'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.

From the current net income level of ø511.40m and the final forecast of ø909.88m by 2021, the annual rate of growth for BAKKA’s earnings is 10.17%. This leads to an EPS of DKK25.72 in the final year of projections relative to the current EPS of DKK10.52. The primary reason for earnings growth is due to reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. With a current profit margin of 13.56%, this movement will result in a margin of 23.52% by 2021.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For P/F Bakkafrost, I've compiled three relevant 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 P/F Bakkafrost 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 P/F Bakkafrost is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of P/F Bakkafrost? 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 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.