On 31 March 2019, Cera Sanitaryware Limited (NSE:CERA) released its earnings update. Generally, analyst consensus outlook appear conservative, with earnings growth rate expected to be 17% next year, which is within range of the past five-year average earnings growth of 17%. Presently, with latest-twelve-month earnings at ₹1.2b, we should see this growing to ₹1.3b by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Cera Sanitaryware in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
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What can we expect from Cera Sanitaryware in the longer term?
The 6 analysts covering CERA 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 CERA'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 15% based on the most recent earnings level of ₹1.2b to the final forecast of ₹1.8b by 2022. This leads to an EPS of ₹137.96 in the final year of projections relative to the current EPS of ₹88.52. Margins are currently sitting at 8.5%, which is expected to expand to 9.2% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Cera Sanitaryware, there are three pertinent 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 Cera Sanitaryware 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 Cera Sanitaryware is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Cera Sanitaryware? 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 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.