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What Do Analysts Think About Peugeot S.A.'s (EPA:UG) Future?

Simply Wall St

In December 2018, Peugeot S.A. (EPA:UG) announced its earnings update. Overall, analyst forecasts seem fairly subdued, as a 16% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 63%. By 2020, we can expect Peugeot’s bottom line to reach €3.3b, a jump from the current trailing-twelve-month of €2.8b. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Peugeot

Exciting times ahead?

Over the next three years, it seems the consensus view of the 21 analysts covering UG 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 understand the overall trajectory of UG's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

ENXTPA:UG Past and Future Earnings, July 23rd 2019

This results in an annual growth rate of 8.8% based on the most recent earnings level of €2.8b to the final forecast of €3.7b by 2022. EPS reaches €3.94 in the final year of forecast compared to the current €3.16 EPS today. With a current profit margin of 3.8%, this movement will result in a margin of 4.7% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Peugeot, I've compiled three pertinent factors you should further examine:

  1. 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.
  2. Valuation: What is Peugeot 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 Peugeot is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Peugeot? 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.