In This Article:
NH Hotel Group SA.’s (BME:NHH) released its most recent earnings update in December 2017, which revealed that the business experienced a slight tailwind, leading to a single-digit earnings growth of 8.31%. Investors may find it useful to understand how market analysts predict NH Hotel Group’s earnings growth trajectory over the next couple of 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. View our latest analysis for NH Hotel Group
Analysts’ expectations for the coming year seems positive, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally reaching €125.97M in 2021.
Even though it is helpful to understand the growth year by year relative to today’s value, it may be more insightful estimating the rate at which the company is growing on average every year. The pro of this method is that we can get a better picture of the direction of NH Hotel Group’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 the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 27.43%. This means that, we can expect NH Hotel Group will grow its earnings by 27.43% every year for the next few years.
Next Steps:
For NH Hotel Group, there are three pertinent factors you should further research:
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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 NHH 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 NHH 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 NHH? 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.