Looking at Wacker Neuson SE’s (FRA:WAC) earnings update in September 2018, analyst consensus outlook appear pessimistic, with profits predicted to drop by -12% next year relative to the past 5-year average growth rate of 8.6%. Presently, with latest-twelve-month earnings at €88m, we should see this fall to €77m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Wacker Neuson in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
Exciting times ahead?
The longer term expectations from the 9 analysts of WAC is tilted towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of WAC’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, WAC’s earnings should reach €90m, from current levels of €88m, resulting in an annual growth rate of 4.0%. This leads to an EPS of €2.01 in the final year of projections relative to the current EPS of €1.25. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 5.7% to 4.9% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Wacker Neuson, I’ve compiled three fundamental 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 Wacker Neuson 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 Wacker Neuson is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Wacker Neuson? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.