Andeavor (NYSE:ANDV): Are Analysts Right About The Drop In Earnings?
In December 2017, Andeavor (NYSE:ANDV) announced its latest earnings update. Overall, analyst consensus outlook appear bearish, with profits predicted to drop by -8.15% next year relative to the past 5-year average growth rate of 11.83%. Currently with a profit of US$1.52B, the consensus growth rate suggests that earnings will drop to US$1.40B by 2019. Below is a brief commentary on the longer term outlook the market has for Andeavor. Investors wanting to learn more about other aspects of the company should research its fundamentals here. Check out our latest analysis for Andeavor
What can we expect from Andeavor in the longer term?
The 14 analysts covering ANDV view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of ANDV’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.
By 2021, ANDV’s earnings should reach US$2.20B, from current levels of US$1.52B, resulting in an annual growth rate of 15.18%. This leads to an EPS of $16.04 in the final year of projections relative to the current EPS of $10.85. The main reason for growth is a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. Margins is currently sitting at 4.44%, which is expected to expand to 4.85% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Andeavor, I’ve compiled three fundamental 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 Andeavor 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 Andeavor is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Andeavor? 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 pass 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.
