Rothschild & Co SCA (EPA:ROTH): Earnings Growth Remains Elusive
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Looking at Rothschild & Co SCA's (EPA:ROTH) earnings update in December 2018, analyst consensus outlook seem bearish, with profits predicted to drop by 12% next year relative to the past 5-year average growth rate of 33%. With trailing-twelve-month net income at current levels of €285m, the consensus growth rate suggests that earnings will decline to €251m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Rothschild & Co in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Rothschild & Co
Exciting times ahead?
Longer term expectations from the 3 analysts covering ROTH’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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 ROTH's earnings growth over these next few years.
This results in an annual growth rate of 1.7% based on the most recent earnings level of €285m to the final forecast of €300m by 2022. EPS reaches €3.99 in the final year of forecast compared to the current €3.88 EPS today. With a current profit margin of 14%, this movement will result in a margin of 15% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Rothschild & Co, I've put together three relevant aspects you should further examine:
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 Rothschild & Co 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 Rothschild & Co is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Rothschild & Co? 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.
