Nestlé S.A. (VTX:NESN): What We Can Expect From This Growth Stock
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In December 2018, Nestlé S.A. (VTX:NESN) announced its earnings update. Overall, analysts seem fairly confident, with profits predicted to increase by 16% next year against the past 5-year average growth rate of -7.9%. Presently, with latest-twelve-month earnings at CHF10b, we should see this growing to CHF12b by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for Nestlé
How will Nestlé perform in the near future?
Over the next three years, it seems the consensus view of the 22 analysts covering NESN 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. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of NESN's earnings growth over these next few years.
By 2022, NESN's earnings should reach CHF14b, from current levels of CHF10b, resulting in an annual growth rate of 9.8%. EPS reaches CHF4.82 in the final year of forecast compared to the current CHF3.36 EPS today. With a current profit margin of 11%, this movement will result in a margin of 14% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Nestlé, there are three important 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 Nestlé 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 Nestlé is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Nestlé? 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.
