Yahoo Finance How Do Analysts See Suncorp Group Limited (ASX:SUN) Performing Over The Next Few Years?
In June 2018, Suncorp Group Limited (ASX:SUN) released its latest earnings announcement, which indicated that the business faced a minor headwind with earnings falling from AU$1.08b to AU$1.06b, a change of -1.5%. Below, I’ve laid out key growth figures on how market analysts perceive Suncorp Group’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Suncorp Group
Analysts’ expectations for the coming year seems pessimistic, with earnings decreasing by a double-digit -25.7%. However, the next few years seem to illustrate a completely different picture, with expected earnings growth rates arriving at double digit 21.8% compared to today’s level and continues to increase.
While it’s useful to be aware of the growth year by year relative to today’s level, it may be more beneficial evaluating the rate at which the business is rising or falling on average every year. The advantage of this approach is that we can get a bigger picture of the direction of Suncorp Group’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put 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 10.2%. This means, we can presume Suncorp Group will grow its earnings by 10.2% every year for the next couple of years.
Next Steps:
For Suncorp Group, there are three important 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 SUN 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 SUN is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SUN? 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.
