Ströer SE & Co. KGaA (FRA:SAX): Are Analysts Bullish?

Ströer SE & Co. KGaA's (FRA:SAX) released its most recent earnings update in December 2018, which confirmed that the business experienced a slight headwind with earnings deteriorating from €113m to €106m, a change of -6.2%. Below, I've laid out key numbers on how market analysts view Ströer SE KGaA's earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Ströer SE KGaA

Market analysts' consensus outlook for the upcoming year seems buoyant, with earnings climbing by a significant 66%. Earnings are predicted to peak in the following year, arriving at €200m before reducing to €170m in 2022.

DB:SAX Past and Future Earnings, April 19th 2019

While it’s helpful to understand the rate of growth each year relative to today’s value, it may be more beneficial to analyze the rate at which the company is moving on average every year. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Ströer SE KGaA's earnings trajectory over time, be more volatile. To calculate this rate, I've inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 16%. This means, we can expect Ströer SE KGaA will grow its earnings by 16% every year for the next couple of years.

Next Steps:

For Ströer SE KGaA, there are three pertinent 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 SAX 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 SAX is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SAX? 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.