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Since Telenor ASA (OB:TEL) released its earnings in March 2019, it seems that analyst forecasts are substantially optimistic, as a 66% rise in profits is expected in the upcoming year, compared with the historical 5-year average growth rate of 10%. With trailing-twelve-month net income at current levels of øre10.0b, we should see this rise to øre16b in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from Telenor in the longer term?
The longer term view from the 17 analysts covering TEL 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. To get an idea of the overall earnings growth trend for TEL, 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.
By 2022, TEL's earnings should reach øre18b, from current levels of øre10.0b, resulting in an annual growth rate of 5.4%. This leads to an EPS of NOK12.13 in the final year of projections relative to the current EPS of NOK6.76. With a current profit margin of 9.0%, this movement will result in a margin of 15% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Telenor, I've put together three essential factors you should look at:
- 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 Telenor 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 Telenor is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Telenor? 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 email@example.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.