Analysts Expect Breakeven For Obrascón Huarte Lain, S.A. (BME:OHL)
Obrascón Huarte Lain, S.A.'s (BME:OHL): Obrascón Huarte Lain, S.A. engages in the concessions and construction businesses primarily in Spain, the United States, Canada, Mexico, Colombia, Peru, Chile, and Central Europe. The €399m market-cap company’s loss lessens since it announced a -€955.4m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -€180.9m, as it approaches breakeven. As path to profitability is the topic on OHL’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for OHL, its year of breakeven and its implied growth rate.
View our latest analysis for Obrascón Huarte Lain
According to the 4 industry analysts covering OHL, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of €11m in 2022. Therefore, OHL is expected to breakeven roughly 2 years from now. How fast will OHL have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 65% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of OHL’s upcoming projects, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. OHL currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in OHL’s case is 96%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of OHL which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at OHL, take a look at OHL’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further examine:
Valuation: What is OHL worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether OHL is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Obrascón Huarte Lain’s board and the CEO’s back ground.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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.
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