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On 31 December 2018, Skanska AB (publ) (STO:SKA B) released its earnings update. Generally, it seems that analyst forecasts are fairly optimistic, as a 11% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 4.0%. Presently, with latest-twelve-month earnings at kr4.6b, we should see this growing to kr5.1b by 2020. Below is a brief commentary around Skanska's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for Skanska
What can we expect from Skanska in the longer term?
The 7 analysts covering SKA B view its longer term outlook with a 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 SKA B, 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.
By 2022, SKA B's earnings should reach kr5.7b, from current levels of kr4.6b, resulting in an annual growth rate of 7.5%. This leads to an EPS of SEK13.83 in the final year of projections relative to the current EPS of SEK11.17. In 2022, SKA B's profit margin will have expanded from 2.7% to 3.4%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Skanska, there are three fundamental 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 Skanska 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 Skanska 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 Skanska? 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.