Vienna Insurance Group AG (VIE:VIG): Is It A Smart Long Term Opportunity?

Simply Wall St

After Vienna Insurance Group AG's (VIE:VIG) earnings announcement in March 2019, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 18% in the upcoming year compared with the past 5-year average growth rate of 4.4%. By 2020, we can expect Vienna Insurance Group’s bottom line to reach €308m, a jump from the current trailing-twelve-month of €261m. Below is a brief commentary on the longer term outlook the market has for Vienna Insurance Group. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Vienna Insurance Group

How is Vienna Insurance Group going to perform in the near future?

Over the next three years, it seems the consensus view of the 6 analysts covering VIG is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. 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 VIG's earnings growth over these next few years.

WBAG:VIG Past and Future Earnings, August 27th 2019

From the current net income level of €261m and the final forecast of €341m by 2022, the annual rate of growth for VIG’s earnings is 6.0%. This leads to an EPS of €2.74 in the final year of projections relative to the current EPS of €2.04. In 2022, VIG's profit margin will have expanded from 2.6% to 3.6%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Vienna Insurance Group, I've compiled three fundamental 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 Vienna Insurance Group 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 Vienna Insurance Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Vienna Insurance Group? 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.