Yahoo Finance Will QBE Insurance Group Limited’s (ASX:QBE) Earnings Grow In The Next Couple Of Years?
In December 2018, QBE Insurance Group Limited (ASX:QBE) announced its most recent earnings update, which confirmed that the company turned profitable again after experiencing losses in the last financial year. Below, I’ve laid out key growth figures on how market analysts view QBE Insurance Group’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
View our latest analysis for QBE Insurance Group
Analysts’ outlook for the coming year seems buoyant, with earnings growing by a robust 42%. This growth seems to continue into the following year with rates arriving at double digit 58% compared to today’s earnings, and finally hitting US$990m by 2022.
Even though it is informative knowing the rate of growth year by year relative to today’s level, it may be more valuable to determine the rate at which the company is moving on average every year. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of QBE Insurance 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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 17%. This means, we can anticipate QBE Insurance Group will grow its earnings by 17% every year for the next few years.
Next Steps:
For QBE Insurance Group, there are three important 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 QBE 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 QBE is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of QBE? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.
