On 30 June 2019, Akzo Nobel N.V. (AMS:AKZA) announced its earnings update. Overall, the consensus outlook from analysts appear fairly confident, as a 48% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of -14%. Currently with trailing-twelve-month earnings of €400m, we can expect this to reach €593m by 2020. Below is a brief commentary on the longer term outlook the market has for Akzo Nobel. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How is Akzo Nobel going to perform in the near future?
Over the next three years, it seems the consensus view of the 21 analysts covering AKZA is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, AKZA's earnings should reach €863m, from current levels of €400m, resulting in an annual growth rate of 17%. This leads to an EPS of €5.35 in the final year of projections relative to the current EPS of €1.77. In 2022, AKZA's profit margin will have expanded from 4.3% to 8.4%.
Future outlook is only one aspect when you're building an investment case for a stock. For Akzo Nobel, there are three fundamental factors you should further research:
- 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.
- Valuation: What is Akzo Nobel 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 Akzo Nobel is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Akzo Nobel? 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 email@example.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.