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EastGroup Properties, Inc. (NYSE:EGP): What Does The Future Look Like?

Simply Wall St

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Looking at EastGroup Properties, Inc.'s (NYSE:EGP) earnings update in December 2018, analyst consensus outlook appear pessimistic, with profits predicted to drop by -8.5% next year compared with the past 5-year average growth rate of 19%. Presently, with latest-twelve-month earnings at US$89m, we should see this fall to US$81m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for EastGroup Properties in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

Check out our latest analysis for EastGroup Properties

Can we expect EastGroup Properties to keep growing?

The 8 analysts covering EGP 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 EGP'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.

NYSE:EGP Past and Future Earnings, March 27th 2019

By 2022, EGP's earnings should reach US$84m, from current levels of US$89m, resulting in an annual growth rate of 1.4%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $2.2 in the final year of forecast compared to the current $2.5 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 29% to 23% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For EastGroup Properties, I've put together three key 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 EastGroup Properties 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 EastGroup Properties is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of EastGroup Properties? 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.