Church & Dwight Co., Inc. (NYSE:CHD): Is It A Smart Long Term Opportunity?
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Looking at Church & Dwight Co., Inc.'s (NYSE:CHD) earnings update in December 2018, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 8.7% in the upcoming year against the higher past 5-year average growth rate of 15%. Currently with trailing-twelve-month earnings of US$569m, we can expect this to reach US$618m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Church & Dwight
What can we expect from Church & Dwight in the longer term?
The view from 20 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for CHD, 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.
This results in an annual growth rate of 6.0% based on the most recent earnings level of US$569m to the final forecast of US$692m by 2022. EPS reaches $2.89 in the final year of forecast compared to the current $2.32 EPS today. Margins are currently sitting at 14%, which is expected to expand to 15% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Church & Dwight, I've compiled three important 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 Church & Dwight 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 Church & Dwight is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Church & Dwight? 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 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.
