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What Do Analysts Think About The Future Of CSL Limited's (ASX:CSL)?

Simply Wall St

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In December 2018, CSL Limited (ASX:CSL) announced its earnings update. Overall, it seems that analyst forecasts are fairly optimistic, with earnings expected to grow by 12% in the upcoming year compared with the past 5-year average growth rate of 6.4%. By 2020, we can expect CSL’s bottom line to reach US$1.9b, a jump from the current trailing-twelve-month of US$1.7b. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for CSL in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for CSL

Can we expect CSL to keep growing?

The longer term view from the 12 analysts covering CSL is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of CSL'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.

ASX:CSL Past and Future Earnings, March 28th 2019

By 2022, CSL's earnings should reach US$2.3b, from current levels of US$1.7b, resulting in an annual growth rate of 9.0%. This leads to an EPS of $5.33 in the final year of projections relative to the current EPS of $3.82. Margins are currently sitting at 22%, which is expected to expand to 24% by 2022.

Next Steps:

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