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Will Wacker Neuson SE's (FRA:WAC) Earnings Grow Over The Next Year?

Simply Wall St

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Based on Wacker Neuson SE's (FRA:WAC) earnings update in March 2019, the consensus outlook from analysts appear bearish, with profits predicted to drop by 17% next year compared with the past 5-year average growth rate of 12%. Currently with a trailing-twelve-month profit of €145m, the consensus growth rate suggests that earnings will drop to €120m by 2020. Below is a brief commentary around Wacker Neuson's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for Wacker Neuson

How is Wacker Neuson going to perform in the near future?

Longer term expectations from the 6 analysts covering WAC’s stock is one of positive 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 WAC, 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.

DB:WAC Past and Future Earnings, July 8th 2019

This results in an annual growth rate of 8.3% based on the most recent earnings level of €145m to the final forecast of €153m by 2022. This leads to an EPS of €2.25 in the final year of projections relative to the current EPS of €2.06. However, the expansion of the current 8.5% margin is not expected to be sustained, as it begins to contract to 7.8% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Wacker Neuson, I've compiled three essential aspects you should further examine:

  1. 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.
  2. 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.
  3. 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!

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.