What Should Investors Know About Banca IFIS S.p.A.’s (BIT:IF) Earnings Trend?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
The most recent earnings update Banca IFIS S.p.A.’s (BIT:IF) released in December 2018 indicated that the company faced a major headwind with earnings declining by -19%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Banca IFIS’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Banca IFIS
Analysts’ outlook for next year seems rather muted, with earnings climbing by a single digit 7.1%. The growth outlook in the following year seems much more optimistic with rates reaching double digit 21% compared to today’s earnings, and finally hitting €181m by 2022.
While it’s helpful to understand the growth each year relative to today’s level, it may be more beneficial to determine the rate at which the company is moving every year, on average. The pro of this technique is that we can get a better picture of the direction of Banca IFIS’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’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 8.1%. This means that, we can anticipate Banca IFIS will grow its earnings by 8.1% every year for the next couple of years.
Next Steps:
For Banca IFIS, there are three key aspects you should further research:
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.
Valuation: What is IF 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 IF is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of IF? 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.
