Yahoo Finance What Should Investors Know About Koninklijke Philips NV’s (AMS:PHIA) Future?
In June 2018, Koninklijke Philips NV (AMS:PHIA) released its earnings update. Generally, analysts seem extremely confident, as a 69% rise in profits is expected in the upcoming year, against the previous 5-year average growth rate of 13%. By 2019, we can expect Koninklijke Philips’s bottom line to reach €1.5b, a jump from the current trailing-twelve-month €871m. 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.
View our latest analysis for Koninklijke Philips
How will Koninklijke Philips perform in the near future?
The longer term view from the 20 analysts covering PHIA is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for PHIA, 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 2021, PHIA’s earnings should reach €2.0b, from current levels of €814m, resulting in an annual growth rate of 18%. EPS reaches €2.29 in the final year of forecast compared to the current €0.88 EPS today. Growth in the bottom line seems to suggest cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. Margins is currently sitting at 4.6%, which is expected to expand to 9.4% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Koninklijke Philips, I’ve put together three essential aspects you should further research:
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 Koninklijke Philips 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 Koninklijke Philips is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Koninklijke Philips? 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.
