How Do Analysts See MSCI Inc. (NYSE:MSCI) Performing Over The Next Few Years?
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The most recent earnings announcement MSCI Inc.’s (NYSE:MSCI) released in December 2018 confirmed that the business gained from a large tailwind, leading to a high double-digit earnings growth of 67%. Below, I’ve laid out key growth figures on how market analysts predict MSCI’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. 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.
Check out our latest analysis for MSCI
Analysts’ outlook for the upcoming year seems rather muted, with earnings climbing by a single digit 2.5%. The growth outlook in the following year seems much more positive with rates generating double digit 12% compared to today’s earnings, and finally hitting US$714m by 2022.
Even though it’s useful to understand the growth rate each year relative to today’s level, it may be more beneficial estimating the rate at which the business is rising or falling on average every year. The advantage of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of MSCI’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 7.4%. This means that, we can anticipate MSCI will grow its earnings by 7.4% every year for the next few years.
Next Steps:
For MSCI, there are three pertinent aspects you should look at:
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 MSCI 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 MSCI is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MSCI? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
