Yahoo Finance Coca-Cola HBC AG (LON:CCH): What Can We Expect From This High Growth Stock?
Coca-Cola HBC AG's (LON:CCH) announced its latest earnings update in December 2018, which revealed that the business benefited from a small tailwind, leading to a single-digit earnings growth of 5.0%. Below is my commentary, albeit very simple and high-level, on how market analysts predict Coca-Cola HBC's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Coca-Cola HBC
Analysts' expectations for next year seems optimistic, with earnings rising by a robust 12%. This growth seems to continue into the following year with rates arriving at double digit 29% compared to today’s earnings, and finally hitting €642m by 2022.
Although it’s informative knowing the growth each year relative to today’s figure, it may be more beneficial evaluating the rate at which the earnings are rising or falling every year, on average. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Coca-Cola HBC's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 11%. This means, we can anticipate Coca-Cola HBC will grow its earnings by 11% every year for the next few years.
Next Steps:
For Coca-Cola HBC, there are three pertinent 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 CCH 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 CCH is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CCH? 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.
