In This Article:
After UBM Development AG’s (VIE:UBS) recent earnings announcement in June 2018, analyst forecasts seem bearish, with profits predicted to drop by -1.0% next year against the past 5-year average growth rate of 21%. With trailing-twelve-month net income at current levels of €40m, the consensus growth rate suggests that earnings will decline to €39m by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for UBM Development in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for UBM Development
How is UBM Development going to perform in the near future?
The longer term expectations from the 5 analysts of UBS is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of UBS’s earnings growth over these next few years.
By 2021, UBS’s earnings should reach €42m, from current levels of €36m, resulting in an annual growth rate of 5.1%. This leads to an EPS of €6.11 in the final year of projections relative to the current EPS of €4.88. Earnings growth appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. In 2021, UBS’s profit margin will have expanded from 10.0% to 10%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For UBM Development, I’ve put together three pertinent factors you should look at:
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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.
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Valuation: What is UBM Development 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 UBM Development is currently mispriced by the market.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of UBM Development? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.