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Since Vidrala SA (BME:VID) released its earnings in June 2018, the consensus outlook from analysts appear fairly confident, as a 18.3% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 14.4%. By 2019, we can expect Vidrala’s bottom line to reach €117.3m, a jump from the current trailing-twelve-month €99.2m. Below is a brief commentary around Vidrala’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.
View our latest analysis for Vidrala
How is Vidrala going to perform in the near future?
Longer term expectations from the 9 analysts covering VID’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of VID’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.
This results in an annual growth rate of 9.2% based on the most recent earnings level of €89.1m to the final forecast of €126.3m by 2021. EPS reaches €5.65 in the final year of forecast compared to the current €3.61 EPS today. Earnings growth appears to be a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. In 2021, VID’s profit margin will have expanded from 10.8% to 13.6%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Vidrala, there are 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 Vidrala 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 Vidrala 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 Vidrala? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.