Yahoo Finance What Should You Know About The Future Of Nokian Renkaat Oyj's (HEL:TYRES)?
Looking at Nokian Renkaat Oyj's (HEL:TYRES) earnings update in March 2019, the consensus outlook from analysts appear bearish, with earnings expected to decline by 15% in the upcoming year compared with the past 5-year average growth rate of 11%. Presently, with latest-twelve-month earnings at €295m, we should see this fall to €250m by 2020. Below is a brief commentary around Nokian Renkaat Oyj's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for Nokian Renkaat Oyj
How is Nokian Renkaat Oyj going to perform in the near future?
Over the next three years, it seems the consensus view of the 17 analysts covering TYRES is skewed towards the negative sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for TYRES, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
By 2022, TYRES's earnings should reach €209m, from current levels of €295m, resulting in an annual growth rate of -13%. However, if we exclude extraordinary items from earnings, we see that the profits is predicted to rise over time, resulting in an EPS of €2.27 in the final year of forecast compared to the current €2.15 EPS today. Fall in earnings appears to be a result of cost growth exceeding top-line growth of 5.7% in the next three years. With this high cost growth, margins is expected to contract from 19% to 11% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Nokian Renkaat Oyj, there are three pertinent 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 Nokian Renkaat Oyj 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 Nokian Renkaat Oyj is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Nokian Renkaat Oyj? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.
