The Boston Beer Company Inc (NYSE:SAM): Earnings Expected To Remain Subdued
In June 2018, The Boston Beer Company Inc (NYSE:SAM) released its earnings update. Generally, the consensus outlook from analysts appear bearish, as a -2.1% fall in profits is expected in the upcoming year against the past 5-year average growth rate of 5.6%. Currently with a railing-twelve-month profit of US$96m, the consensus growth rate suggests that earnings will drop to US$94m by 2019. Below is a brief commentary on the longer term outlook the market has for Boston Beer Company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for Boston Beer Company
What can we expect from Boston Beer Company in the longer term?
The 10 analysts covering SAM view its longer term outlook with a 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 SAM’s earnings growth over these next few years.
From the current net income level of US$99m and the final forecast of US$121m by 2021, the annual rate of growth for SAM’s earnings is 9.8%. EPS reaches $10.51 in the final year of forecast compared to the current $8.18 EPS today. The primary reason for earnings growth is due to cost cutting activities, as revenues is expected to grow much slower than earnings. In 2021, SAM’s profit margin will have expanded from 11% to 12%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Boston Beer Company, I’ve compiled three key 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 Boston Beer Company 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 Boston Beer Company is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Boston Beer Company? 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.
