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After Greif, Inc.'s (NYSE:GEF) earnings announcement in April 2019, analyst consensus outlook appear cautiously optimistic, as a 41% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 18%. Presently, with latest-twelve-month earnings at US$209m, we should see this growing to US$296m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Can we expect Greif to keep growing?
The longer term view from the 7 analysts covering GEF 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. To understand the overall trajectory of GEF'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.
This results in an annual growth rate of 17% based on the most recent earnings level of US$209m to the final forecast of US$372m by 2022. This leads to an EPS of $4.52 in the final year of projections relative to the current EPS of $4.37. In 2022, GEF's profit margin will have expanded from 5.4% to 7.7%.
Future outlook is only one aspect when you're building an investment case for a stock. For Greif, I've put together three fundamental 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 Greif 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 Greif is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Greif? 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.