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Société Marseillaise du Tunnel Prado Carénage's (EPA:SMTPC) latest earnings update in May 2019 revealed that the business faced a slight headwind with earnings deteriorating from €15m to €13m, a change of -9.7%. Below is my commentary, albeit very simple and high-level, on how market analysts view Société Marseillaise du Tunnel Prado Carénage's earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Société Marseillaise du Tunnel Prado Carénage
Analysts' outlook for the upcoming year seems pessimistic, with earnings decreasing by a double-digit -18%. In the next couple of years, earnings should continue to be below today's level, with a decline of -13% in 2021, eventually reaching €12m in 2022.
Even though it is informative knowing the rate of growth each year relative to today’s value, it may be more beneficial analyzing the rate at which the company is growing on average every year. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Société Marseillaise du Tunnel Prado Carénage's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've appended 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 -0.5%. This means, we can presume Société Marseillaise du Tunnel Prado Carénage will chip away at a rate of -0.5% every year for the next few years.
Next Steps:
For Société Marseillaise du Tunnel Prado Carénage, there are three key factors you should further examine:
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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 SMTPC 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 SMTPC 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 SMTPC? 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.