Yahoo Finance Will China Petroleum & Chemical Corporation’s (HKG:386) Earnings Grow In The Year Ahead?
Based on China Petroleum & Chemical Corporation’s (HKG:386) earnings update in March 2018, analyst consensus outlook appear vastly optimistic, with earnings expected to grow by a high double-digit of 50.81% in the upcoming year, against the past 5-year average growth rate of -8.23%. With trailing-twelve-month net income at current levels of CN¥53.35b, we should see this rise to CN¥80.46b in 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for China Petroleum & Chemical
How will China Petroleum & Chemical perform in the near future?
The view from 19 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for 386, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 3.30% based on the most recent earnings level of CN¥51.24b to the final forecast of CN¥79.81b by 2021. EPS reaches CN¥0.67 in the final year of forecast compared to the current CN¥0.42 EPS today. Growth in earnings appears to be a result of top-line expansion of 4.82%, dropping down to the bottome-line. By the end of 2021, analysts are expecting earnings to outpace revenue, and margins to expand from the current 2.17% to 2.78%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For China Petroleum & Chemical, I’ve compiled three relevant aspects 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 China Petroleum & Chemical 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 China Petroleum & Chemical is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Petroleum & Chemical? 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.
