What Do Investors Need To Know About Boliden AB’s (STO:BOL) Earnings Trend?

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.

Check out our latest analysis for Boliden

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.

OM:BOL Past and Future Earnings, February 27th 2019
OM:BOL Past and Future Earnings, February 27th 2019

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.

Next Steps:

For Boliden, there are three important aspects you should look at:

  1. 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.
  2. 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.
  3. 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!

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 editorial-team@simplywallst.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.