The latest earnings announcement NIBE Industrier AB (publ) (STO:NIBE B) released in December 2018 indicated that the company benefited from a robust tailwind, leading to a double-digit earnings growth of 22%. Below is a brief commentary on my key takeaways on how market analysts perceive NIBE Industrier’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. 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 NIBE Industrier
Analysts’ outlook for the upcoming year seems buoyant, with earnings growing by a robust 12%. This growth seems to continue into the following year with rates arriving at double digit 23% compared to today’s earnings, and finally hitting kr2.7b by 2022.
Although it’s useful to understand the growth rate year by year relative to today’s value, it may be more valuable gauging the rate at which the business is rising or falling on average every year. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of NIBE Industrier’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 9.1%. This means, we can anticipate NIBE Industrier will grow its earnings by 9.1% every year for the next few years.
Next Steps:
For NIBE Industrier, there are 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 NIBE B 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 NIBE B 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 NIBE B? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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