Ascendas India Trust’s (SGX:CY6U) latest earnings announcement in March 2018 showed that the company benefited from a strong tailwind, leading to a double-digit earnings growth of 37.47%. Today I want to provide a brief commentary on how market analysts perceive Ascendas India Trust’s earnings growth outlook over the next couple of 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 Ascendas India Trust
Market analysts’ prospects for next year seems pessimistic, with earnings reducing by a double-digit -65.40%. Beyond this, earnings are predicted to continue to be below today’s level, with a decline of -63.83% in 2020, eventually reaching S$69.19M in 2021.
Even though it’s useful to understand the rate of growth each year relative to today’s level, it may be more beneficial determining the rate at which the company is moving every year, on average. The benefit of this approach is that we can get a bigger picture of the direction of Ascendas India Trust’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put 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 -39.54%. This means that, we can expect Ascendas India Trust will chip away at a rate of -39.54% every year for the next few years.
For Ascendas India Trust, I’ve compiled three fundamental 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 CY6U 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 CY6U is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CY6U? 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.