What Are Analysts Saying About Scentre Group’s (ASX:SCG) Earnings Outlook?
Scentre Group’s (ASX:SCG) latest earnings update in June 2017 showed that the business experienced a strong tailwind, leading to a double-digit earnings growth of 10.44%. Below, I’ve laid out key numbers on how market analysts perceive Scentre Group’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. Check out our latest analysis for Scentre Group
Analysts’ outlook for next year seems pessimistic, with earnings decreasing by a double-digit -47.91%. In the next couple of years, earnings are predicted to continue to be below today’s level, with a decline of -51.49% in 2020, eventually reaching A$1,575.8M in 2021.
Although it’s helpful to be aware of the growth rate each year relative to today’s level, it may be more insightful gauging the rate at which the earnings are rising or falling on average every year. The advantage of this approach is that it ignores near term flucuations and accounts for the overarching direction of Scentre Group’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted 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 -8.62%. This means that, we can assume Scentre Group will chip away at a rate of -8.62% every year for the next couple of years.
Next Steps:
For Scentre Group, there are three key aspects you should further research:
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 SCG 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 SCG is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SCG? 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 pass 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.
