Gielda Papierów Wartosciowych w Warszawie SA (WSE:GPW): Should The Future Outlook Worry You?

On 30 September 2018, Gielda Papierów Wartosciowych w Warszawie SA (WSE:GPW) released its most recent earnings update. Generally, the consensus outlook from analysts appear bearish, as a -19% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 11%. With trailing-twelve-month net income at current levels of zł185m, the consensus growth rate suggests that earnings will decline to zł150m by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Gielda Papierów Wartosciowych w Warszawie in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for Gielda Papierów Wartosciowych w Warszawie

How is Gielda Papierów Wartosciowych w Warszawie going to perform in the near future?

The view from 3 analysts over the next three years is one of negative sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of GPW’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.

WSE:GPW Future Profit November 12th 18
WSE:GPW Future Profit November 12th 18

This results in an annual growth rate of -10% based on the most recent earnings level of zł156m to the final forecast of zł106m by 2021. EPS reaches PLN3.06 in the final year of forecast compared to the current PLN3.72 EPS today. The bottom-line decline seems to be caused by a reduction in the top line of -3.0%, squeezing the bottom line. By 2021, margins are projected to decline from 44% to 33% as a result in a faster fall in profits.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Gielda Papierów Wartosciowych w Warszawie, I’ve compiled three essential aspects you should further research:

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