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Since Agilent Technologies, Inc. (NYSE:A) released its earnings in April 2019, analyst consensus outlook seem bearish, with profits predicted to drop by 6.1% next year relative to the past 5-year average growth rate of 16%. Currently with a trailing-twelve-month profit of US$316m, the consensus growth rate suggests that earnings will drop to US$297m by 2020. Below is a brief commentary around Agilent Technologies's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Agilent Technologies to keep growing?
The 14 analysts covering A view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of A's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of US$316m and the final forecast of US$331m by 2022, the annual rate of growth for A’s earnings is 0.4%. EPS reaches $3.83 in the final year of forecast compared to the current $0.98 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 6.4% to 5.6% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Agilent Technologies, I've compiled three essential factors 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 Agilent Technologies 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 Agilent Technologies is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Agilent Technologies? 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 email@example.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.