Yahoo Finance Elders Limited (ASX:ELD): Will The Growth Last?
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Looking at Elders Limited's (ASX:ELD) earnings update in March 2019, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 6.7% next year relative to the higher past 5-year average growth rate of 44%. Presently, with latest-twelve-month earnings at AU$79m, we should see this growing to AU$84m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Elders in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Elders
How is Elders going to perform in the near future?
The longer term view from the 4 analysts covering ELD is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of ELD's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, ELD's earnings should reach AU$103m, from current levels of AU$79m, resulting in an annual growth rate of 9.4%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of A$0.66 in the final year of forecast compared to the current A$0.68 EPS today. Margins are currently sitting at 4.9%, which is expected to expand to 5.6% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Elders, there are three fundamental factors 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 Elders 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 Elders is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Elders? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.
