What Should We Expect From AstraZeneca PLC's (LON:AZN) Earnings In The Year Ahead?
Looking at AstraZeneca PLC's (LON:AZN) earnings update in March 2019, the consensus outlook from analysts appear conservative, with earnings growth rate expected to be 11% next year, which is within range of the past five-year average earnings growth of 12%. Currently with trailing-twelve-month earnings of US$2.2b, we can expect this to reach US$2.4b by 2020. Below is a brief commentary around AstraZeneca's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
View our latest analysis for AstraZeneca
Exciting times ahead?
Longer term expectations from the 20 analysts covering AZN’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of AZN's earnings growth over these next few years.
This results in an annual growth rate of 28% based on the most recent earnings level of US$2.2b to the final forecast of US$4.6b by 2022. This leads to an EPS of $3.84 in the final year of projections relative to the current EPS of $1.7. With a current profit margin of 9.8%, this movement will result in a margin of 16% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For AstraZeneca, there are three essential factors 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 AstraZeneca 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 AstraZeneca is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of AstraZeneca? 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.
