Autoliv, Inc. (NYSE:ALV): What We Can Expect From This Growth Stock

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Based on Autoliv, Inc.’s (NYSE:ALV) earnings update in March 2019, analyst consensus outlook appear vastly optimistic, with earnings expected to grow by a high double-digit of 83% in the upcoming year, relative to the past 5-year average growth rate of 4.2%. Currently with trailing-twelve-month earnings of US$376m, we can expect this to reach US$689m by 2020. Below is a brief commentary on the longer term outlook the market has for Autoliv. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for Autoliv

What can we expect from Autoliv in the longer term?

Longer term expectations from the 22 analysts covering ALV’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for ALV, 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.

NYSE:ALV Past and Future Earnings, July 17th 2019
NYSE:ALV Past and Future Earnings, July 17th 2019

From the current net income level of US$376m and the final forecast of US$871m by 2022, the annual rate of growth for ALV’s earnings is 15%. EPS reaches $8.73 in the final year of forecast compared to the current $4.32 EPS today. In 2022, ALV’s profit margin will have expanded from 4.3% to 8.8%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Autoliv, I’ve put together three fundamental factors you should further research:

  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 Autoliv 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 Autoliv is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Autoliv? 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.