After Recticel NV/SA’s (EBR:REC) earnings announcement on 31 December 2018, analysts seem fairly confident, as a 28% increase in profits is expected in the upcoming year, though this is evidently lower than the previous 5-year average earnings growth of 69%. Currently with trailing-twelve-month earnings of €29m, we can expect this to reach €37m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for Recticel/SA
What can we expect from Recticel/SA in the longer term?
Over the next three years, it seems the consensus view of the 3 analysts covering REC is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of REC’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of €29m and the final forecast of €47m by 2022, the annual rate of growth for REC’s earnings is 16%. This leads to an EPS of €0.83 in the final year of projections relative to the current EPS of €0.53. Margins are currently sitting at 2.6%, which is expected to expand to 4.2% by 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Recticel/SA, I’ve compiled three relevant factors you should further examine:
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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 Recticel/SA 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 Recticel/SA 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 Recticel/SA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.