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As Solvay SA (EBR:SOLB) released its earnings announcement on 31 March 2019, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 9.0% next year compared with the higher past 5-year average growth rate of 25%. Presently, with latest-twelve-month earnings at €657m, we should see this growing to €716m by 2020. Below is a brief commentary on the longer term outlook the market has for Solvay. For those interested in more of an analysis of the company, you can research its fundamentals here.
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See our latest analysis for Solvay
Exciting times ahead?
Over the next three years, it seems the consensus view of the 14 analysts covering SOLB is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of SOLB's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of €657m and the final forecast of €844m by 2022, the annual rate of growth for SOLB’s earnings is 7.5%. EPS reaches €9.2 in the final year of forecast compared to the current €6.36 EPS today. In 2022, SOLB's profit margin will have expanded from 5.8% to 7.3%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Solvay, there are three key 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 Solvay 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 Solvay 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 Solvay? 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.