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How Do Analysts See Enerplus Corporation (TSE:ERF) Performing In The Years Ahead?

Will Harmon

The latest earnings release Enerplus Corporation’s (TSX:ERF) announced in December 2017 confirmed that the company endured a immense headwind with earnings falling by -40.37%. Below, I’ve laid out key growth figures on how market analysts view Enerplus’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. View our latest analysis for Enerplus

Analysts’ outlook for this coming year seems buoyant, with earnings increasing by a robust 10.97%. This growth seems to continue into the following year with rates arriving at double digit 29.54% compared to today’s earnings and decreases to CA$279.08M by 2021.

TSX:ERF Future Profit Apr 23rd 18

While it’s helpful to understand the rate of growth year by year relative to today’s figure, it may be more insightful to determine the rate at which the company is growing on average every year. The advantage of this technique is that it ignores near term flucuations and accounts for the overarching direction of Enerplus’s earnings trajectory over time, be more volatile. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 6.26%. This means that, we can assume Enerplus will grow its earnings by 6.26% every year for the next few years.

Next Steps:

For Enerplus, there are three fundamental factors you should further examine:

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