How will Omnicom Group perform in the near future?The longer term expectations from the 12 analysts of OMC is tilted towards the 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. From the current net income level of US$1.09b and the final forecast of US$1.42b by 2021, the annual rate of growth for OMC’s earnings is 7.17%. EPS reaches $6.5 in the final year of forecast compared to the current $4.68 EPS today. Growth in earnings appears to be a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. In 2021, OMC’s profit margin will have expanded from 7.12% to 8.46%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Omnicom Group, I’ve compiled three key factors you should further examine:
- 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 Omnicom Group 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 Omnicom Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Omnicom Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!