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In December 2018, Keppel DC REIT (SGX:AJBU) released its most recent earnings announcement, which suggested that the business experienced a significant tailwind, more than doubling its earnings from the prior year. Below, I’ve laid out key growth figures on how market analysts predict Keppel DC REIT’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Market analysts’ prospects for this coming year seems pessimistic, with earnings declining by a double-digit -21%. Beyond this, earnings should continue to be below today’s level, with a decline of -14% in 2021, eventually reaching S$121m in 2022.
Even though it is helpful to understand the rate of growth each year relative to today’s level, it may be more valuable estimating the rate at which the company is moving every year, on average. The advantage of this technique is that we can get a better picture of the direction of Keppel DC REIT’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -6.2%. This means that, we can presume Keppel DC REIT will chip away at a rate of -6.2% every year for the next few years.
For Keppel DC REIT, I’ve put together three essential aspects you should further examine:
- 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 AJBU 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 AJBU is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AJBU? 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 email@example.com.