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In December 2018, Van Lanschot Kempen N.V. (AMS:VLK) announced its latest earnings update, which signalled that the business endured a substantial headwind with earnings deteriorating by -20%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Van Lanschot Kempen's earnings growth trajectory over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Van Lanschot Kempen
Market analysts' consensus outlook for the upcoming year seems optimistic, with earnings increasing by a robust 41%. However, earnings is expected to fall slightly in the following year before rising again to €85m in 2022.
Although it’s useful to be aware of the rate of growth year by year relative to today’s value, it may be more valuable to determine the rate at which the earnings are moving on average every year. The pro of this method is that we can get a better picture of the direction of Van Lanschot Kempen's earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 8.5%. This means, we can expect Van Lanschot Kempen will grow its earnings by 8.5% every year for the next couple of years.
Next Steps:
For Van Lanschot Kempen, there are three key 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 VLK 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 VLK 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 VLK? 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.