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AIMS AMP Capital Industrial REIT (SGX:O5RU): What Does The Future Look Like?

Armando Maloney

AIMS AMP Capital Industrial REIT’s (SGX:O5RU) announced its latest earnings update in March 2018, which revealed that the company experienced a substantial tailwind, more than doubling its earnings from the prior year. Below is a brief commentary on my key takeaways on how market analysts view AIMS AMP Capital Industrial REIT’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. 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 AIMS AMP Capital Industrial REIT

Analysts’ expectations for this coming year seems positive, with earnings expanding by a robust 10.80%. This growth seems to continue into the following year with rates arriving at double digit 11.94% compared to today’s earnings, and finally hitting S$68.80M by 2021.

SGX:O5RU Future Profit Jun 13th 18

Although it’s helpful to understand the growth each year relative to today’s level, it may be more insightful estimating the rate at which the earnings are rising or falling every year, on average. The advantage of this technique is that we can get a bigger picture of the direction of AIMS AMP Capital Industrial REIT’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 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 3.53%. This means, we can anticipate AIMS AMP Capital Industrial REIT will grow its earnings by 3.53% every year for the next couple of years.

Next Steps:

For AIMS AMP Capital Industrial REIT, there are three important aspects you should look at:

  1. 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.
  2. Valuation: What is O5RU 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 O5RU is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of O5RU? 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 pass 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.