After Boston Properties, Inc.'s (NYSE:BXP) earnings announcement in December 2018, analyst forecasts seem fairly subdued, with earnings expected to grow by -14% in the upcoming year compared with the higher past 5-year average growth rate of 0.6%. Currently with trailing-twelve-month earnings of US$572m, we can expect this to reach US$491m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Can we expect Boston Properties to keep growing?
Over the next three years, it seems the consensus view of the 7 analysts covering BXP is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of BXP'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 2.0% based on the most recent earnings level of US$572m to the final forecast of US$584m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $3.55 in the final year of forecast compared to the current $3.71 EPS today. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 21% to 18% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Boston Properties, 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 Boston Properties 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 Properties is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Boston Properties? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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If you spot an error that warrants correction, please contact the editor at email@example.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.