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What Are Analysts Saying About Royal Gold, Inc.'s (NASDAQ:RGLD) Future?

Simply Wall St

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On 31 March 2019, Royal Gold, Inc. (NASDAQ:RGLD) released its earnings update. Generally, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 33% next year against the past 5-year average growth rate of -27%. Presently, with latest-twelve-month earnings at -US$113.1m, we should see this growing to -US$150.7m by 2020. Below is a brief commentary on the longer term outlook the market has for Royal Gold. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for Royal Gold

How will Royal Gold perform in the near future?

The longer term view from the 8 analysts covering RGLD is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for RGLD, 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.

NasdaqGS:RGLD Past and Future Earnings, May 6th 2019

From the current net income level of -US$113.1m and the final forecast of -US$133.3m by 2022, the annual rate of growth for RGLD’s earnings is 4.6%. This leads to an EPS of $1.71 in the final year of projections relative to the current EPS of $-1.73. Margins are currently sitting at -25%, which is expected to expand to -26% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Royal Gold, I've put together three essential aspects you should look at:

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