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As MTU Aero Engines AG (ETR:MTX) released its earnings announcement on 31 March 2019, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 9.2% in the upcoming year against the higher past 5-year average growth rate of 20%. With trailing-twelve-month net income at current levels of €447m, we should see this rise to €488m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How is MTU Aero Engines going to perform in the near future?
Longer term expectations from the 21 analysts covering MTX’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of MTX'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.
This results in an annual growth rate of 7.4% based on the most recent earnings level of €447m to the final forecast of €584m by 2022. EPS reaches €11.37 in the final year of forecast compared to the current €8.67 EPS today. Margins are currently sitting at 9.8%, which is expected to expand to 11% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For MTU Aero Engines, I've compiled three important 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 MTU Aero Engines 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 MTU Aero Engines is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of MTU Aero Engines? 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 email@example.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.