Yahoo Finance What Should We Expect From Salvatore Ferragamo S.p.A.'s (BIT:SFER) Earnings Over The Next Few Years?
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Salvatore Ferragamo S.p.A.'s (BIT:SFER) announced its latest earnings update in December 2018, which showed that the business faced a significant headwind with earnings deteriorating by -26%. Below is my commentary, albeit very simple and high-level, on how market analysts view Salvatore Ferragamo's earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Salvatore Ferragamo
Analysts' expectations for the coming year seems optimistic, with earnings increasing by a robust 20%. This growth seems to continue into the following year with rates reaching double digit 42% compared to today’s earnings, and finally hitting €140m by 2022.
While it’s helpful to be aware of the growth each year relative to today’s level, it may be more valuable evaluating the rate at which the company is rising or falling on average every year. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of Salvatore Ferragamo's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've appended 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 14%. This means, we can assume Salvatore Ferragamo will grow its earnings by 14% every year for the next few years.
Next Steps:
For Salvatore Ferragamo, I've compiled three key 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 SFER 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 SFER is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SFER? 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.
