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Will CapitaLand Mall Trust's (SGX:C38U) Earnings Grow In Next 12 Months?

Simply Wall St

On 31 December 2018, CapitaLand Mall Trust (SGX:C38U) released its most recent earnings update. Generally, analyst forecasts seem bearish, as a -30% fall in profits is expected in the upcoming year compared with the past 5-year average growth rate of 2.4%. With trailing-twelve-month net income at current levels of S$677m, the consensus growth rate suggests that earnings will decline to S$470m by 2020. Below is a brief commentary on the longer term outlook the market has for CapitaLand Mall Trust. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for CapitaLand Mall Trust

How will CapitaLand Mall Trust perform in the near future?

Longer term expectations from the 20 analysts covering C38U’s stock is one of negative 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 C38U'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.

SGX:C38U Past and Future Earnings, April 11th 2019

By 2022, C38U's earnings should reach S$573m, from current levels of S$677m, resulting in an annual growth rate of -5.2%. This leads to an EPS of SGD0.14 in the final year of projections relative to the current EPS of SGD0.19. The primary reason for earnings contraction is due to top-line expansion of 6.4%, which is predicted to lag cost growth leading up to 2022. Furthermore, the current 97% margin is expected to contract to 68% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For CapitaLand Mall Trust, I've compiled three fundamental aspects 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 CapitaLand Mall Trust 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 CapitaLand Mall Trust is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CapitaLand Mall Trust? 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.