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How Do Analysts See Tempur Sealy International, Inc. (NYSE:TPX) Performing In The Year Ahead?

Simply Wall St

As Tempur Sealy International, Inc. (NYSE:TPX) released its earnings announcement on 30 June 2019, it seems that analyst forecasts are substantially optimistic, with earnings expected to grow by a high double-digit of 76% in the upcoming year, against the past 5-year average growth rate of 9.5%. With trailing-twelve-month net income at current levels of US$118m, we should see this rise to US$208m in 2020. Below is a brief commentary around Tempur Sealy International's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for Tempur Sealy International

How will Tempur Sealy International perform in the near future?

The longer term expectations from the 11 analysts of TPX is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for TPX, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:TPX Past and Future Earnings, August 28th 2019

This results in an annual growth rate of 18% based on the most recent earnings level of US$118m to the final forecast of US$289m by 2022. EPS reaches $6.5 in the final year of forecast compared to the current $2.17 EPS today. In 2022, TPX's profit margin will have expanded from 4.4% to 8.2%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Tempur Sealy International, there are three relevant 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 Tempur Sealy International 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 Tempur Sealy International is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Tempur Sealy International? 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.