Yahoo Finance What Should Investors Know About Australian Pharmaceutical Industries Limited’s (ASX:API) Future?
Looking at Australian Pharmaceutical Industries Limited’s (ASX:API) earnings update in August 2018, analysts seem fairly confident, with profits predicted to increase by 25% next year, though this is noticeably lower than the previous 5-year average earnings growth of 45%. Currently with trailing-twelve-month earnings of AU$48m, we can expect this to reach AU$60m by 2019. Below is a brief commentary on the longer term outlook the market has for Australian Pharmaceutical Industries. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Australian Pharmaceutical Industries
How will Australian Pharmaceutical Industries perform in the near future?
The longer term view from the 4 analysts covering API 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. 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 API’s earnings growth over these next few years.
By 2021, API’s earnings should reach AU$66m, from current levels of AU$48m, resulting in an annual growth rate of 10%. EPS reaches A$0.13 in the final year of forecast compared to the current A$0.098 EPS today. In 2021, API’s profit margin will have expanded from 1.2% to 1.6%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Australian Pharmaceutical Industries, I’ve compiled three fundamental 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 Australian Pharmaceutical Industries 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 Australian Pharmaceutical Industries is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Australian Pharmaceutical Industries? 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.
