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For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou (ENXTPA:CRTO) useful as an attempt to give more color around how Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou is currently performing. See our latest analysis for Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou
Did CRTO’s recent earnings growth beat the long-term trend and the industry?
I like to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to assess various companies in a uniform manner using the latest information. For Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou, its most recent trailing-twelve-month earnings is €70.92M, which compared to the previous year’s level, Given that these figures may be relatively short-term, I’ve created an annualized five-year figure for Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou’s earnings, which stands at €71.44M This suggests that Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou’s annual earnings on average have historically been higher, which implies a downward trend in profitability.
What could be happening here? Well, let’s look at what’s going on with margins and whether the whole industry is feeling the heat. In the last couple of years, revenue growth has failed to keep up which suggests that Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou’s bottom line has been driven by unsustainable cost-reductions. Inspecting growth from a sector-level, the FR banks industry has been relatively flat in terms of earnings growth over the previous couple of years. This shows that any recent headwind the industry is enduring, Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou is less exposed compared to its peers.
What does this mean?
Though Caisse Régionale de Crédit Agricole Mutuel de La Touraine et du Poitou’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company.