U.S. Markets closed

What Do Analysts Think About Singapore Exchange Limited's (SGX:S68) Growth?

Simply Wall St

In March 2019, Singapore Exchange Limited (SGX:S68) released its earnings update. Generally, analysts seem cautiously optimistic, with earnings expected to grow by 7.8% in the upcoming year relative to the past 5-year average growth rate of 2.4%. With trailing-twelve-month net income at current levels of S$363m, we should see this rise to S$392m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for Singapore Exchange

Can we expect Singapore Exchange to keep growing?

Longer term expectations from the 13 analysts covering S68’s stock 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 get an idea of the overall earnings growth trend for S68, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

SGX:S68 Past and Future Earnings, August 1st 2019

From the current net income level of S$363m and the final forecast of S$424m by 2022, the annual rate of growth for S68’s earnings is 4.6%. EPS reaches SGD0.40 in the final year of forecast compared to the current SGD0.34 EPS today. In 2022, S68's profit margin will have expanded from 43% to 44%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Singapore Exchange, I've put together three pertinent factors you should further research:

  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 Singapore Exchange 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 Singapore Exchange is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Singapore Exchange? 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.