Fomento de Construcciones y Contratas, S.A.'s (BME:FCC) most recent earnings announcement in December 2018 signalled that the business benefited from a significant tailwind, more than doubling its earnings from the prior year. Below is a brief commentary on my key takeaways on how market analysts predict Fomento de Construcciones y Contratas's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Fomento de Construcciones y Contratas

Market analysts' prospects for the upcoming year seems pessimistic, with earnings declining by -3.8%. But in the following year, there is a complete contrast in performance, with arriving at double digit 13% compared to today’s level and continues to increase to €345m in 2022.

While it is helpful to understand the rate of growth each year relative to today’s value, it may be more insightful to estimate the rate at which the company is growing on average every year. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Fomento de Construcciones y Contratas'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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 10%. This means that, we can expect Fomento de Construcciones y Contratas will grow its earnings by 10% every year for the next couple of years.

Next Steps:

For Fomento de Construcciones y Contratas, I've put together three essential factors you should further examine:

1. 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.

2. Valuation: What is FCC 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 FCC is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FCC? 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.