Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In December 2018, Brambles Limited (ASX:BXB) released its earnings update. Generally, analyst forecasts appear to be bearish, as a 3.0% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 3.5%. Presently, with latest-twelve-month earnings at US$774m, we should see this fall to US$750m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Brambles in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from Brambles in the longer term?
Over the next three years, it seems the consensus view of the 6 analysts covering BXB is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of BXB's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, BXB's earnings should reach US$865m, from current levels of US$774m, resulting in an annual growth rate of 5.9%. EPS reaches $0.52 in the final year of forecast compared to the current $0.49 EPS today. Margins are currently sitting at 13%, which is expected to expand to 17% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Brambles, I've compiled three relevant factors 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 Brambles 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 Brambles is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Brambles? 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 firstname.lastname@example.org. 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.