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Since Brembo S.p.A. (BIT:BRE) released its earnings in December 2018, it seems that analyst expectations are fairly bearish, as a 8.1% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 19%. Presently, with latest-twelve-month earnings at €238m, we should see this growing to €258m by 2020. Below is a brief commentary around Brembo’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Brembo perform in the near future?
The 5 analysts covering BRE view its longer term outlook with a 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 BRE, 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, BRE’s earnings should reach €282m, from current levels of €238m, resulting in an annual growth rate of 5.4%. EPS reaches €0.85 in the final year of forecast compared to the current €0.73 EPS today. With a current profit margin of 8.9%, this movement will result in a margin of 9.5% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Brembo, I’ve compiled three fundamental 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 Brembo 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 Brembo is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Brembo? 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.
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