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In December 2018, Italgas S.p.A. (BIT:IG) released its earnings update. Generally, it seems that analyst forecasts are fairly optimistic, as a 4.8% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of -6.2%. With trailing-twelve-month net income at current levels of €314m, we should see this rise to €329m in 2020. Below is a brief commentary around Italgas's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Italgas
Exciting times ahead?
The longer term view from the 13 analysts covering IG is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of €314m and the final forecast of €362m by 2022, the annual rate of growth for IG’s earnings is 5.3%. This leads to an EPS of €0.45 in the final year of projections relative to the current EPS of €0.39. In 2022, IG's profit margin will have expanded from 19% to 29%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Italgas, I've compiled three relevant factors 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 Italgas 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 Italgas 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 Italgas? 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.