As Industria de Diseño Textil, S.A. (BME:ITX) released its earnings announcement on 31 January 2019, analysts seem fairly confident, as a 10% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 8.6%. By 2020, we can expect Industria de Diseño Textil’s bottom line to reach €3.8b, a jump from the current trailing-twelve-month of €3.4b. Below is a brief commentary around Industria de Diseño Textil's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
How is Industria de Diseño Textil going to perform in the near future?
The 24 analysts covering ITX view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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.
This results in an annual growth rate of 7.7% based on the most recent earnings level of €3.4b to the final forecast of €4.4b by 2022. EPS reaches €1.41 in the final year of forecast compared to the current €1.11 EPS today. In 2022, ITX's profit margin will have expanded from 13% to 14%.
Future outlook is only one aspect when you're building an investment case for a stock. For Industria de Diseño Textil, there are three fundamental aspects 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 Industria de Diseño Textil 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 Industria de Diseño Textil is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Industria de Diseño Textil? 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.