Yahoo Finance What Should You Know About The Future Of Credicorp Ltd.’s (NYSE:BAP)?
The latest earnings release Credicorp Ltd.’s (NYSE:BAP) announced in December 2018 signalled that the business faced a slight headwind with earnings falling from S./4.1b to S./4.0b, a change of -2.6%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Credicorp’s earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for Credicorp
Market analysts’ consensus outlook for next year seems positive, with earnings climbing by a robust 15%. This growth seems to continue into the following year with rates arriving at double digit 29% compared to today’s earnings, and finally hitting S./5.6b by 2022.
While it is useful to be aware of the rate of growth year by year relative to today’s value, it may be more valuable gauging the rate at which the earnings are growing on average every year. The benefit of this approach is that we can get a bigger picture of the direction of Credicorp’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 11%. This means that, we can assume Credicorp will grow its earnings by 11% every year for the next couple of years.
Next Steps:
For Credicorp, I’ve put together 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 BAP 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 BAP is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BAP? 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.
