Yahoo Finance What Are Analysts Saying About Orora Limited’s (ASX:ORA) Earnings Trajectory?
Orora Limited’s (ASX:ORA) most recent earnings announcement in June 2018 showed that the business experienced a strong tailwind, leading to a double-digit earnings growth of 24%. Below is my commentary, albeit very simple and high-level, on how market analysts predict Orora’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. 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.
See our latest analysis for Orora
Analysts’ expectations for this coming year seems rather subdued, with earnings growing by a single digit 4.9%. The growth outlook in the following year seems much more optimistic with rates reaching double digit 12% compared to today’s earnings, and finally hitting AU$250m by 2021.
Even though it is informative understanding the growth each year relative to today’s figure, it may be more valuable gauging the rate at which the company is growing every year, on average. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Orora’s earnings trajectory over time, which may be more relevant for long term investors. To compute 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 5.5%. This means, we can presume Orora will grow its earnings by 5.5% every year for the next few years.
Next Steps:
For Orora, there are three fundamental aspects you should further examine:
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 ORA 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 ORA is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ORA? 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.
