Yahoo Finance Orange SA (EPA:ORA): What Are The Future Prospects?
In June 2018, Orange SA (EPA:ORA) released its earnings update. Generally, analysts seem extremely confident, as a 63% rise in profits is expected in the upcoming year, relative to the previous 5-year average growth rate of 2.7%. By 2019, we can expect Orange’s bottom line to reach €2.9b, a jump from the current trailing-twelve-month €1.8b. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Orange in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for Orange
Exciting times ahead?
Over the next three years, it seems the consensus view of the 28 analysts covering ORA is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of ORA’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 12% based on the most recent earnings level of €1.6b to the final forecast of €3.2b by 2021. This leads to an EPS of €1.37 in the final year of projections relative to the current EPS of €0.61. The bottom-line growth seems to be caused by cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 3.9%, this movement will result in a margin of 7.6% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Orange, I’ve compiled three key 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 Orange 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 Orange is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Orange? 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.
