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In December 2018, Brembo S.p.A. (BIT:BRE) released its earnings update. Generally, analyst consensus outlook appear cautiously subdued, as a 8.1% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 19%. With trailing-twelve-month net income at current levels of €238m, we should see this rise to €258m in 2020. 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.
How will Brembo perform in the near future?
The view from 5 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of BRE's earnings growth over these next few years.
By 2022, BRE's earnings should reach €282m, from current levels of €238m, resulting in an annual growth rate of 5.4%. EPS reaches €0.85 in the final year of forecast compared to the current €0.73 EPS today. In 2022, BRE's profit margin will have expanded from 8.9% to 9.5%.
Future outlook is only one aspect when you're building an investment case for a stock. For Brembo, I've compiled three key factors you should look at:
- 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 Brembo 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 Brembo is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Brembo? 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 firstname.lastname@example.org. 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.