In This Article:
The most recent earnings announcement Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft’s (DB:MUV2) released in December 2017 indicated that the company endured a significant headwind with earnings falling by -85.47%. Today I want to provide a brief commentary on how market analysts perceive Münchener Rückversicherungs-Gesellschaft’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. See our latest analysis for Münchener Rückversicherungs-Gesellschaft
Market analysts’ consensus outlook for the coming year seems optimistic, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally generating €2.81B in 2021.
Even though it’s useful to understand the rate of growth year by year relative to today’s value, it may be more insightful analyzing the rate at which the business is rising or falling every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of Münchener Rückversicherungs-Gesellschaft’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 25.26%. This means that, we can assume Münchener Rückversicherungs-Gesellschaft will grow its earnings by 25.26% every year for the next few years.
Next Steps:
For Münchener Rückversicherungs-Gesellschaft, I’ve put together three relevant 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 MUV2 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 MUV2 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 MUV2? 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.