Boliden AB’s (STO:BOL) latest earnings update in December 2018 suggested that the company benefited from a slight tailwind, eventuating to a single-digit earnings growth of 5.0%. Below, I’ve laid out key growth figures on how market analysts view Boliden’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts’ outlook for the coming year seems pessimistic, with earnings falling by a double-digit -18%. Beyond this, earnings should continue to be below today’s level, with a decline of -19% in 2021, eventually reaching kr5.8b in 2022.
Although it’s informative understanding the rate of growth year by year relative to today’s figure, it may be more insightful evaluating the rate at which the earnings are rising or falling on average every year. The benefit of this method is that we can get a bigger picture of the direction of Boliden’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To calculate this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -6.4%. This means, we can assume Boliden will chip away at a rate of -6.4% every year for the next few years.
For Boliden, there are three important 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 BOL 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 BOL is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BOL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.