What Do Analysts Think About The Future Of Resolute Mining Limited’s (ASX:RSG)?
Looking at Resolute Mining Limited’s (ASX:RSG) earnings update in June 2018, analysts seem cautiously optimistic, with earnings expected to grow by 35% in the upcoming year compared with the past 5-year average growth rate of 27%. With trailing-twelve-month net income at current levels of AU$66m, we should see this rise to AU$88m in 2019. Below is a brief commentary on the longer term outlook the market has for Resolute Mining. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for Resolute Mining
What can we expect from Resolute Mining in the longer term?
The view from 7 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of RSG’s earnings growth over these next few years.
This results in an annual growth rate of 25% based on the most recent earnings level of AU$66m to the final forecast of AU$152m by 2021. This leads to an EPS of A$0.20 in the final year of projections relative to the current EPS of A$0.089. With a current profit margin of 15%, this movement will result in a margin of 23% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Resolute Mining, there are three relevant 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 Resolute Mining 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 Resolute Mining is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Resolute Mining? 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.
