What Should Investors Know About Givaudan SA's (VTX:GIVN) Growth?

Based on Givaudan SA's (VTX:GIVN) earnings update on 30 June 2019, the consensus outlook from analysts appear fairly confident, with earnings expected to grow by 16% in the upcoming year compared with the past 5-year average growth rate of 4.7%. Presently, with latest-twelve-month earnings at CHF663m, we should see this growing to CHF768m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Givaudan in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for Givaudan

Can we expect Givaudan to keep growing?

The view from 21 analysts over the next three years 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 GIVN, 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.

SWX:GIVN Past and Future Earnings, August 13th 2019
SWX:GIVN Past and Future Earnings, August 13th 2019

By 2022, GIVN's earnings should reach CHF956m, from current levels of CHF663m, resulting in an annual growth rate of 11%. This leads to an EPS of CHF104.76 in the final year of projections relative to the current EPS of CHF71.92. With a current profit margin of 12%, this movement will result in a margin of 15% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Givaudan, there are three relevant 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 Givaudan 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 Givaudan is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Givaudan? 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.