After China Mobile Limited's (HKG:941) earnings announcement in March 2019, analysts seem cautiously optimistic, with earnings expected to grow by 3.2% in the upcoming year relative to the past 5-year average growth rate of 0.8%. By 2020, we can expect China Mobile’s bottom line to reach CN¥122b, a jump from the current trailing-twelve-month of CN¥118b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for China Mobile in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect China Mobile to keep growing?
The 22 analysts covering 941 view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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.
By 2022, 941's earnings should reach CN¥129b, from current levels of CN¥118b, resulting in an annual growth rate of 3.1%. This leads to an EPS of CN¥6.28 in the final year of projections relative to the current EPS of CN¥5.75. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 16% to 16% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For China Mobile, there are three key factors 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 China Mobile 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 China Mobile is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Mobile? 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.