In December 2018, Gunnebo AB (STO:GUNN) released its earnings update. Generally, analysts seem cautiously optimistic, with earnings expected to grow by 30% in the upcoming year compared with the past 5-year average growth rate of -0.5%. Currently with trailing-twelve-month earnings of kr120m, we can expect this to reach kr157m by 2020. Below is a brief commentary on the longer term outlook the market has for Gunnebo. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from Gunnebo in the longer term?
The longer term view from the 2 analysts covering GUNN 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 get an idea of the overall earnings growth trend for GUNN, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of kr120m and the final forecast of kr196m by 2022, the annual rate of growth for GUNN’s earnings is 15%. EPS reaches SEK2.55 in the final year of forecast compared to the current SEK1.57 EPS today. In 2022, GUNN’s profit margin will have expanded from 2.3% to 3.6%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Gunnebo, I’ve put together three important 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 Gunnebo 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 Gunnebo is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Gunnebo? 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 firstname.lastname@example.org. 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.