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How Do Analysts See Mapletree Industrial Trust (SGX:ME8U) Performing In The Years Ahead?

Simply Wall St

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In March 2019, Mapletree Industrial Trust (SGX:ME8U) announced its latest earnings update, which signalled that the company faced a minor headwind with earnings deteriorating from S$301m to S$271m, a change of -9.8%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Mapletree Industrial Trust's earnings growth outlook over the next few 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 Mapletree Industrial Trust

Market analysts' consensus outlook for next year seems pessimistic, with earnings reducing by -5.8%. But in the following year, there is a complete contrast in performance, with arriving at double digit 1.4% compared to today’s level and continues to increase to S$280m in 2022.

SGX:ME8U Past and Future Earnings, June 17th 2019

While it is informative understanding the growth rate each year relative to today’s level, it may be more valuable evaluating the rate at which the earnings are growing on average every year. The benefit of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Mapletree Industrial Trust's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put 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 1.6%. This means that, we can presume Mapletree Industrial Trust will grow its earnings by 1.6% every year for the next few years.

Next Steps:

For Mapletree Industrial Trust, I've compiled three pertinent factors 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 ME8U 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 ME8U is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ME8U? 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.