U.S. Markets closed

What Are Analysts Saying About Delphi Technologies PLC's (NYSE:DLPH) Future?

Simply Wall St

The latest earnings announcement Delphi Technologies PLC (NYSE:DLPH) released in December 2018 revealed that the company benefited from a robust tailwind, leading to a double-digit earnings growth of 26%. Below, I've laid out key numbers on how market analysts perceive Delphi Technologies'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.

See our latest analysis for Delphi Technologies

Market analysts' prospects for the coming year seems pessimistic, with earnings falling by a double-digit -35%. Over the medium term, earnings are expected to continue to be below today's level, with a decline of -21% in 2021, eventually reaching US$281m in 2022.

NYSE:DLPH Past and Future Earnings, April 10th 2019

Even though it is informative understanding the growth rate each year relative to today’s level, it may be more beneficial to evaluate the rate at which the company is growing on average every year. The pro of this technique is that we can get a bigger picture of the direction of Delphi Technologies'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 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 2.1%. This means, we can presume Delphi Technologies will grow its earnings by 2.1% every year for the next few years.

Next Steps:

For Delphi Technologies, there are three essential factors you should further examine:

  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 DLPH 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 DLPH is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DLPH? 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.