Yahoo Finance What Should Investors Know About Super Retail Group Limited’s (ASX:SUL) Earnings Outlook?
The most recent earnings announcement Super Retail Group Limited’s (ASX:SUL) released in June 2018 showed that the company benefited from a robust tailwind, leading to a double-digit earnings growth of 26%. Below, I’ve laid out key numbers on how market analysts predict Super Retail Group’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for Super Retail Group
Analysts’ expectations for next year seems positive, with earnings rising by a robust 19%. This growth seems to continue into the following year with rates reaching double digit 26% compared to today’s earnings, and finally hitting AU$169m by 2021.
While it’s informative understanding the rate of growth year by year relative to today’s value, it may be more insightful to estimate the rate at which the earnings are rising or falling on average every year. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of Super Retail Group’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 6.8%. This means that, we can presume Super Retail Group will grow its earnings by 6.8% every year for the next few years.
Next Steps:
For Super Retail Group, there are three key 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 SUL 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 SUL is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SUL? 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.
