Yahoo Finance What Should We Expect From Adelaide Brighton Limited’s (ASX:ABC) Earnings In The Year Ahead?
Based on Adelaide Brighton Limited’s (ASX:ABC) earnings update in June 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 11% in the upcoming year compared with the past 5-year average growth rate of 5.1%. Presently, with latest-twelve-month earnings at AU$195m, we should see this growing to AU$216m by 2019. Below is a brief commentary on the longer term outlook the market has for Adelaide Brighton. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for Adelaide Brighton
Exciting times ahead?
Over the next three years, it seems the consensus view of the 10 analysts covering ABC is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2021, ABC’s earnings should reach AU$225m, from current levels of AU$182m, resulting in an annual growth rate of 5.9%. EPS reaches A$0.34 in the final year of forecast compared to the current A$0.28 EPS today. The primary reason for earnings growth is due to cost cutting activities, as revenues is expected to grow much slower than earnings. In 2021, ABC’s profit margin will have expanded from 12% to 13%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Adelaide Brighton, there are three essential 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 Adelaide Brighton 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 Adelaide Brighton is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Adelaide Brighton? 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.
