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Uponor Oyj's (HEL:UPONOR) released its most recent earnings update in December 2018, which confirmed that the company experienced a substantial headwind with earnings declining by -13%. Below is a brief commentary on my key takeaways on how market analysts view Uponor Oyj's earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Uponor Oyj
Analysts' expectations for the coming year seems positive, with earnings increasing by a robust 18%. This growth seems to continue into the following year with rates reaching double digit 29% compared to today’s earnings, and finally hitting €73m by 2022.
Even though it’s helpful to be aware of the rate of growth year by year relative to today’s value, it may be more beneficial evaluating the rate at which the business is moving every year, on average. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Uponor Oyj's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted 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 10%. This means that, we can presume Uponor Oyj will grow its earnings by 10% every year for the next couple of years.
Next Steps:
For Uponor Oyj, I've compiled three fundamental aspects you should further examine:
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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 UPONOR 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 UPONOR 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 UPONOR? 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.