In This Article:
Heineken NV.’s (ENXTAM:HEIA) most recent earnings update in December 2017 confirmed that the company gained from a robust tailwind, eventuating to a double-digit earnings growth of 25.65%. Below, I’ve presented key growth figures on how market analysts perceive Heineken’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. View our latest analysis for Heineken
Analysts’ outlook for next year seems rather muted, with earnings growing by a single digit 9.85%. The growth outlook in the following year seems much more optimistic with rates generating double digit 21.49% compared to today’s earnings, and finally hitting €2.58B by 2021.
While it’s informative knowing the rate of growth year by year relative to today’s level, it may be more valuable estimating the rate at which the earnings are growing on average every year. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Heineken’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 8.92%. This means that, we can expect Heineken will grow its earnings by 8.92% every year for the next couple of years.
Next Steps:
For Heineken, I’ve put together three relevant aspects you should further research:
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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.
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Valuation: What is HEIA 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 HEIA is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of HEIA? 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 pass 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.