Yahoo Finance Will Orora Limited’s (ASX:ORA) Earnings Grow In The Year Ahead?
Looking at Orora Limited’s (ASX:ORA) earnings update in June 2018, the consensus outlook from analysts appear somewhat bearish, as a 5.6% rise in profits is expected in the upcoming year, against the higher past 5-year average growth rate of 37%. Presently, with latest-twelve-month earnings at AU$212m, we should see this growing to AU$224m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Orora in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
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Exciting times ahead?
Longer term expectations from the 12 analysts covering ORA’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around 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.
This results in an annual growth rate of 5.8% based on the most recent earnings level of AU$212m to the final forecast of AU$257m by 2022. This leads to an EPS of A$0.21 in the final year of projections relative to the current EPS of A$0.18. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 5.0% to 4.9% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Orora, I’ve put together three key aspects you should further examine:
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 Orora 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 Orora is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Orora? 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.
