Yahoo Finance Vonovia SE (ETR:VNA): What Does The Future Look Like?
As Vonovia SE (ETR:VNA) released its earnings announcement on 30 June 2019, it seems that analyst forecasts are substantially optimistic, with a bottom line expansion of more than 100% in the upcoming year, compared with the historical 5-year average growth rate of 34%. With trailing-twelve-month net income at current levels of €2.3b, we should see this rise to €4.6b in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for Vonovia
What can we expect from Vonovia in the longer term?
The 10 analysts covering VNA view its longer term outlook with a negative sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of €2.3b and the final forecast of €4.1b by 2022, the annual rate of growth for VNA’s earnings is -4.5%. EPS reaches €3.18 in the final year of forecast compared to the current €4.48 EPS today. Fall in earnings appears to be a result of cost outpacing top line growth of 0.7% over the next few years. But by the end of 2022, analysts are expecting slower cost growth, resulting in a margin expansion, from the recent 56% to 176%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Vonovia, I've compiled three key 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 Vonovia 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 Vonovia is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Vonovia? 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.
