The generation of profits is the cornerstone that gives solidity to a company. From there, it is possible to reduce debt, generate cash or pay a dividend. Although there are also companies that, despite modest profits, or even losses, and notable leverage, are attractive for their growth capacity and the future promise of profitability: the benefits will come.
The criteria for selecting a security for its earnings per share, although relevant, is not decisive. “At Cellnex it would be a secondary issue since it is a company in full growth,” explains Juan Fernández-Figares. The market consensus, in fact, does not expect earnings per share this year for the company after the capital increase, although it is the value for which a greater increase is estimated, of more than 30%, according to the target price that analysts handle.
Acciona. It is the Ibex company that offers the highest earnings per share this year, of 5.63 euros, according to the Factset consensus, although its dividend yield of 2.7% is far from being one of the highest in the index , like its potential, of 3.3%.
ArcelorMittal. It occupies one of the most prominent positions in forecasting earnings per share this year, at 4.45 euros, and is also one of the companies in which the consensus on results for 2021 has improved the most in the last three months. Thus, another important reference would be not only the estimate of earnings, but the degree to which the market expects them to improve, which gives an idea of bullish expectations for a security. In the case of the steel company, in the focus of investor appetite for cyclicals, the market forecast for its earnings per share this year has taken a gigantic jump of 77% in the last quarter. In PharmaMar, on the other hand, with a market estimate of 4.34 euros of earnings per share, the forecast has fallen almost 30%.
Cyclicals and banking. “The analysis of benefits must be seen in the context of growth of the company itself and also of the sector,” says Gonzalo Sánchez, manager of Gesconsult. Faced with the expectation of economic recovery, Repsol and Acerinox also stand out in improving EPS forecasts for the market, followed at a certain distance by Banco Santander and BBVA.
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