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After Owens Corning's (NYSE:OC) recent earnings announcement in December 2018, it seems that analyst forecasts are fairly bearish, with earnings expected to decline by -1.2% in the upcoming year compared with the past 5-year average growth rate of 12%. Presently, with latest-twelve-month earnings at US$545m, we should see this fall to US$539m by 2020. Below is a brief commentary around Owens Corning'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.
What can we expect from Owens Corning in the longer term?
Over the next three years, it seems the consensus view of the 18 analysts covering OC is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of OC's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 6.4% based on the most recent earnings level of US$545m to the final forecast of US$653m by 2022. EPS reaches $6.28 in the final year of forecast compared to the current $4.94 EPS today. With a current profit margin of 7.7%, this movement will result in a margin of 8.7% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Owens Corning, I've put together three fundamental aspects you should look at:
- 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 Owens Corning 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 Owens Corning is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Owens Corning? 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.