China Aircraft Leasing Group Holdings Limited's (HKG:1848) announced its latest earnings update in December 2018, which signalled that the company gained from a robust tailwind, eventuating to a double-digit earnings growth of 10%. Below is my commentary, albeit very simple and high-level, on how market analysts predict China Aircraft Leasing Group Holdings's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
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Market analysts' consensus outlook for the upcoming year seems rather subdued, with earnings climbing by a single digit 8.2%. The growth outlook in the following year seems much more optimistic with rates reaching double digit 23% compared to today’s earnings, and finally hitting HK$1.2b by 2022.
Although it is useful to be aware of the growth each year relative to today’s level, it may be more insightful to gauge the rate at which the earnings are growing on average every year. The benefit of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of China Aircraft Leasing Group Holdings's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've appended 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 12%. This means that, we can presume China Aircraft Leasing Group Holdings will grow its earnings by 12% every year for the next couple of years.
For China Aircraft Leasing Group Holdings, there are three key 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.
- Future Earnings: How does 1848's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1848? 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.