As Danaher Corporation (NYSE:DHR) released its earnings announcement on 31 December 2018, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 7.2% next year compared with the past 5-year average growth rate of 1.7%. Presently, with latest-twelve-month earnings at US$2.7b, we should see this growing to US$2.8b by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Danaher in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Exciting times ahead?
Longer term expectations from the 16 analysts covering DHR’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of DHR’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.
By 2022, DHR’s earnings should reach US$3.8b, from current levels of US$2.7b, resulting in an annual growth rate of 9.9%. This leads to an EPS of $4.84 in the final year of projections relative to the current EPS of $3.78. Margins are currently sitting at 13%, which is expected to expand to 17% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Danaher, I’ve put together three important aspects you should further examine:
- 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 Danaher 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 Danaher is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Danaher? 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.