In This Article:
Savencia SA's (EPA:SAVE) latest earnings update in April 2019 revealed that the company experienced a major headwind with earnings deteriorating by -41%. Below, I've laid out key growth figures on how market analysts perceive Savencia's earnings growth outlook over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Savencia
Market analysts' prospects for next year seems positive, with earnings climbing by a significant 81%. This strong growth in earnings is expected to continue, bringing the bottom line up to €128m by 2022.
Although it’s helpful to be aware of the rate of growth each year relative to today’s level, it may be more insightful to estimate the rate at which the earnings are moving every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of Savencia's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 24%. This means, we can assume Savencia will grow its earnings by 24% every year for the next few years.
Next Steps:
For Savencia, I've compiled three important aspects you should look at:
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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 SAVE 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 SAVE 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 SAVE? 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.