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What Are Analysts Saying About Ascott Residence Trust's (SGX:A68U) Growth?

Simply Wall St

After Ascott Residence Trust's (SGX:A68U) earnings announcement in December 2018, it seems that analyst expectations are fairly bearish, with profits predicted to rise by -3.5% next year against the higher past 5-year average growth rate of -2.8%. By 2020, we can expect Ascott Residence Trust’s bottom line to reach S$124m, a jump from the current trailing-twelve-month of S$128m. Below is a brief commentary around Ascott Residence Trust's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

Check out our latest analysis for Ascott Residence Trust

Exciting times ahead?

The longer term expectations from the 11 analysts of A68U is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for A68U, 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.

SGX:A68U Past and Future Earnings, April 23rd 2019

By 2022, A68U's earnings should reach S$134m, from current levels of S$128m, resulting in an annual growth rate of 1.6%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of SGD0.057 in the final year of forecast compared to the current SGD0.059 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 25% to 24% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Ascott Residence Trust, I've compiled three essential 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 Ascott Residence Trust 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 Ascott Residence Trust is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ascott Residence Trust? 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 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.