In This Article:
After Coca-Cola HBC AG’s (LON:CCH) earnings announcement in June 2018, analyst forecasts seem fairly subdued, with earnings expected to grow by 13% in the upcoming year against the higher past 5-year average growth rate of 16%. By 2019, we can expect Coca-Cola HBC’s bottom line to reach €483m, a jump from the current trailing-twelve-month €426m. 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.
View our latest analysis for Coca-Cola HBC
What can we expect from Coca-Cola HBC in the longer term?
The longer term expectations from the 14 analysts of CCH is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of CCH’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.
This results in an annual growth rate of 9.6% based on the most recent earnings level of €426m to the final forecast of €591m by 2021. EPS reaches €1.69 in the final year of forecast compared to the current €1.17 EPS today. Growth in earnings appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 6.5%, this movement will result in a margin of 8.0% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Coca-Cola HBC, I’ve compiled three pertinent aspects 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 Coca-Cola HBC 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 Coca-Cola HBC 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 Coca-Cola HBC? 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.