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Will CIT Group Inc.’s (NYSE:CIT) Earnings Grow Over The Next Year?

Daryl Painter

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On 31 December 2018, CIT Group Inc. (NYSE:CIT) released its earnings update. Generally, analysts seem fairly confident, with earnings expected to grow by 2.3% in the upcoming year relative to the past 5-year average growth rate of -31%. By 2020, we can expect CIT Group’s bottom line to reach US$464m, a jump from the current trailing-twelve-month of US$453m. 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 CIT Group

Exciting times ahead?

Longer term expectations from the 6 analysts covering CIT’s stock 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 CIT, 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.

NYSE:CIT Past and Future Earnings, February 24th 2019

By 2022, CIT’s earnings should reach US$478m, from current levels of US$453m, resulting in an annual growth rate of 2.7%. EPS reaches $6.21 in the final year of forecast compared to the current $3.85 EPS today. Margins are currently sitting at 20%, which is expected to expand to 25% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For CIT Group, I’ve put together three essential factors you should look at:

  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 CIT Group 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 CIT Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CIT Group? 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.