Looking at Matthews International Corporation’s (NASDAQ:MATW) earnings update on 30 September 2018, analysts seem cautiously bearish, with earnings expected to grow by 0.6% in the upcoming year relative to the higher past 5-year average growth rate of 17%. With trailing-twelve-month net income at current levels of US$107m, we should see this rise to US$108m in 2019. Below is a brief commentary around Matthews International’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Matthews International to keep growing?
The 4 analysts covering MATW view its longer term outlook with a 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 reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$107m and the final forecast of US$121m by 2021, the annual rate of growth for MATW’s earnings is 4.1%. This leads to an EPS of $4 in the final year of projections relative to the current EPS of $3.39. Margins are currently sitting at 6.7%, which is expected to expand to 7.1% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For Matthews International, there are three essential 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 Matthews International 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 Matthews International is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Matthews International? 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 past 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. For errors that warrant correction please contact the editor at email@example.com.