As Petrofac Limited (LON:PFC) released its earnings announcement on 30 June 2019, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 26% next year against the past 5-year average growth rate of -4.1%. By 2020, we can expect Petrofac’s bottom line to reach US$81m, a jump from the current trailing-twelve-month of US$64m. Below is a brief commentary on the longer term outlook the market has for Petrofac. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
Longer term expectations from the 16 analysts covering PFC’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for PFC, 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.
By 2022, PFC's earnings should reach US$93m, from current levels of US$64m, resulting in an annual growth rate of 6.7%. EPS reaches $0.86 in the final year of forecast compared to the current $0.19 EPS today. With a current profit margin of 1.1%, this movement will result in a margin of 1.7% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Petrofac, I've put together three important 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 Petrofac 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 Petrofac is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Petrofac? 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 firstname.lastname@example.org. 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.