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In September 2018, Stalprodukt S.A. (WSE:STP) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 9.7% in the upcoming year compared with the higher past 5-year average growth rate of 28%. With trailing-twelve-month net income at current levels of zł254m, we should see this rise to zł279m in 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Stalprodukt in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
Longer term expectations from the 3 analysts covering STP’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, STP’s earnings should reach zł257m, from current levels of zł254m, resulting in an annual growth rate of 0.05%. EPS reaches PLN51.67 in the final year of forecast compared to the current PLN45.6 EPS today. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 7.3% to 7.1% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Stalprodukt, I’ve put together three pertinent aspects you should look at:
- 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 Stalprodukt 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 Stalprodukt is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Stalprodukt? 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.