As Centuria Metropolitan REIT (ASX:CMA) released its earnings announcement on 30 June 2019, the consensus outlook from analysts appear highly confident, with profits predicted to ramp up by an impressive 68% next year, compared with the past 5-year average growth rate of 44%. By 2020, we can expect Centuria Metropolitan REIT’s bottom line to reach AU$90m, a jump from the current trailing-twelve-month of AU$54m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Centuria Metropolitan REIT in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Can we expect Centuria Metropolitan REIT to keep growing?
The view from 3 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for CMA, 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.
From the current net income level of AU$54m and the final forecast of AU$88m by 2022, the annual rate of growth for CMA’s earnings is 12%. This leads to an EPS of A$0.29 in the final year of projections relative to the current EPS of A$0.16. In 2022, CMA's profit margin will have expanded from 49% to 74%.
Future outlook is only one aspect when you're building an investment case for a stock. For Centuria Metropolitan REIT, I've put together three essential aspects you should further research:
- 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 Centuria Metropolitan REIT 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 Centuria Metropolitan REIT is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Centuria Metropolitan REIT? 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 firstname.lastname@example.org. 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.