The most recent earnings update Banque Cantonale Vaudoise’s (VTX:BCVN) released in December 2018 showed that the company gained from a small tailwind, eventuating to a single-digit earnings growth of 9.2%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Banque Cantonale Vaudoise’s earnings growth trajectory over the next few 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.
Check out our latest analysis for Banque Cantonale Vaudoise
Market analysts’ consensus outlook for next year seems rather muted, with earnings climbing by a single digit 1.6%. The following year doesn’t look much more exciting, though earnings does reach CHF379m in 2022.
While it’s helpful to understand the rate of growth each year relative to today’s figure, it may be more beneficial determining the rate at which the company is rising or falling on average every year. The advantage of this technique is that we can get a bigger picture of the direction of Banque Cantonale Vaudoise’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put 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 2.0%. This means that, we can presume Banque Cantonale Vaudoise will grow its earnings by 2.0% every year for the next few years.
Next Steps:
For Banque Cantonale Vaudoise, there are three important aspects you should look at:
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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 BCVN 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 BCVN 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 BCVN? 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.