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Looking at ENEA S.A.’s (WSE:ENA) earnings update in September 2018, analysts seem cautiously optimistic, with profits predicted to increase by 5.4% next year against the past 5-year average growth rate of 2.6%. Currently with trailing-twelve-month earnings of zł1.1b, we can expect this to reach zł1.1b by 2020. Below is a brief commentary on the longer term outlook the market has for ENEA. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from ENEA in the longer term?
Over the next three years, it seems the consensus view of the 8 analysts covering ENA is skewed towards the 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 ENA’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 zł1.1b and the final forecast of zł1.8b by 2022, the annual rate of growth for ENA’s earnings is 24%. EPS reaches PLN3.5 in the final year of forecast compared to the current PLN2.42 EPS today. With a current profit margin of 9.4%, this movement will result in a margin of 13% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For ENEA, there are three essential 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 ENEA 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 ENEA is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ENEA? 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. On rare occasion, data errors may occur. Thank you for reading.