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What Should Investors Know About Salvatore Ferragamo S.p.A.’s (BIT:SFER) Growth?

Since Salvatore Ferragamo S.p.A. (BIT:SFER) released its earnings in September 2018, analysts seem fairly confident, as a 27% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of -3.1%. Currently with trailing-twelve-month earnings of €119m, we can expect this to reach €151m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Salvatore Ferragamo

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How is Salvatore Ferragamo going to perform in the near future?

Over the next three years, it seems the consensus view of the 22 analysts covering SFER is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

BIT:SFER Future Profit January 15th 19
BIT:SFER Future Profit January 15th 19

This results in an annual growth rate of 14% based on the most recent earnings level of €119m to the final forecast of €188m by 2022. EPS reaches €1.03 in the final year of forecast compared to the current €0.70 EPS today. In 2022, SFER’s profit margin will have expanded from 8.5% to 12%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Salvatore Ferragamo, there are three key aspects you should further examine:

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  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 Salvatore Ferragamo 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 Salvatore Ferragamo is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Salvatore Ferragamo? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.