Yahoo Finance What Should Investors Know About Novo Nordisk A/S's (CPH:NOVO B) Growth?
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Since Novo Nordisk A/S (CPH:NOVO B) released its earnings in March 2019, analyst forecasts seem fairly subdued, as a 4.8% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 8.4%. By 2020, we can expect Novo Nordisk’s bottom line to reach ø40b, a jump from the current trailing-twelve-month of ø39b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Novo Nordisk in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for Novo Nordisk
What can we expect from Novo Nordisk in the longer term?
Over the next three years, it seems the consensus view of the 26 analysts covering NOVO B is skewed towards the 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 NOVO B's earnings growth over these next few years.
This results in an annual growth rate of 8.8% based on the most recent earnings level of ø39b to the final forecast of ø49b by 2022. This leads to an EPS of DKK21.2 in the final year of projections relative to the current EPS of DKK15.96. In 2022, NOVO B's profit margin will have expanded from 35% to 36%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Novo Nordisk, there are three pertinent factors you should further examine:
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 Novo Nordisk 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 Novo Nordisk is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Novo Nordisk? 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.
