In December 2018, The Interpublic Group of Companies, Inc. (NYSE:IPG) announced its earnings update. Overall, analyst forecasts seem fairly subdued, as a 4.4% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 12%. With trailing-twelve-month net income at current levels of US$619m, we should see this rise to US$646m in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Interpublic Group of Companies in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How is Interpublic Group of Companies going to perform in the near future?
The 9 analysts covering IPG view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of IPG's earnings growth over these next few years.
From the current net income level of US$619m and the final forecast of US$744m by 2022, the annual rate of growth for IPG’s earnings is 4.2%. EPS reaches $2.2 in the final year of forecast compared to the current $1.61 EPS today. By the end of 2022, analysts are expecting earnings to outpace revenue, and margins to expand from the current 7.7% to 8.1%.
Future outlook is only one aspect when you're building an investment case for a stock. For Interpublic Group of Companies, I've put together three pertinent 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 Interpublic Group of Companies 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 Interpublic Group of Companies is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Interpublic Group of Companies? 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 firstname.lastname@example.org. 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.