Siemens Healthineers AG (ETR:SHL): Immense Growth Potential?
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As Siemens Healthineers AG (ETR:SHL) announced its earnings release on 31 December 2018, analyst consensus outlook appear cautiously optimistic, as a 24% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 0.5%. By 2020, we can expect Siemens Healthineers’s bottom line to reach €1.6b, a jump from the current trailing-twelve-month of €1.3b. Below is a brief commentary on the longer term outlook the market has for Siemens Healthineers. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for Siemens Healthineers
How will Siemens Healthineers perform in the near future?
The longer term expectations from the 18 analysts of SHL is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for SHL, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 9.9% based on the most recent earnings level of €1.3b to the final forecast of €1.9b by 2022. EPS reaches €1.95 in the final year of forecast compared to the current €1.27 EPS today. In 2022, SHL’s profit margin will have expanded from 9.4% to 12%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Siemens Healthineers, I’ve compiled three pertinent 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 Siemens Healthineers 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 Siemens Healthineers is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Siemens Healthineers? 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.
