As Forbo Holding AG (VTX:FORN) announced its earnings release on 31 December 2018, analysts seem fairly confident, as a 3.1% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of -4.7%. With trailing-twelve-month net income at current levels of CHF138m, we should see this rise to CHF142m in 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Forbo Holding in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
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Exciting times ahead?
The view from 7 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for FORN, 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, FORN’s earnings should reach CHF156m, from current levels of CHF138m, resulting in an annual growth rate of 3.9%. This leads to an EPS of CHF105.98 in the final year of projections relative to the current EPS of CHF82.37. In 2022, FORN’s profit margin will have expanded from 10% to 11%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Forbo Holding, I’ve compiled three important 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 Forbo Holding 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 Forbo Holding 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 Forbo Holding? 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.