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In December 2018, Antofagasta plc (LON:ANTO) released its earnings update. Generally, the consensus outlook from analysts appear fairly confident, with earnings expected to grow by 43% in the upcoming year compared with the past 5-year average growth rate of 5.9%. By 2020, we can expect Antofagasta’s bottom line to reach US$702m, a jump from the current trailing-twelve-month of US$492m. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from Antofagasta in the longer term?
The 18 analysts covering ANTO 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 get an idea of the overall earnings growth trend for ANTO, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$492m and the final forecast of US$692m by 2022, the annual rate of growth for ANTO’s earnings is 11%. This leads to an EPS of $0.90 in the final year of projections relative to the current EPS of $0.50. In 2022, ANTO's profit margin will have expanded from 10% to 13%.
Future outlook is only one aspect when you're building an investment case for a stock. For Antofagasta, I've compiled three pertinent factors 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 Antofagasta 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 Antofagasta is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Antofagasta? 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 firstname.lastname@example.org. 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.