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As Lindab International AB (STO:LIAB) announced its earnings release on 31 December 2018, analysts seem cautiously optimistic, as a 25% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 6.2%. With trailing-twelve-month net income at current levels of kr394m, we should see this rise to kr494m in 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Lindab International in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Lindab International perform in the near future?
Longer term expectations from the 4 analysts covering LIAB’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 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.
This results in an annual growth rate of 12% based on the most recent earnings level of kr394m to the final forecast of kr588m by 2022. EPS reaches SEK7.7 in the final year of forecast compared to the current SEK5.16 EPS today. With a current profit margin of 4.2%, this movement will result in a margin of 5.7% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Lindab International, 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 Lindab International 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 Lindab International is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Lindab International? 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 email@example.com.