As Belden Inc. (NYSE:BDC) announced its earnings release on 31 December 2018, analyst consensus outlook appear cautiously optimistic, as a 33% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 0.9%. With trailing-twelve-month net income at current levels of US$126m, we should see this rise to US$167m in 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.
Can we expect Belden to keep growing?
The longer term expectations from the 9 analysts of BDC is tilted towards the 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 reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$126m and the final forecast of US$222m by 2022, the annual rate of growth for BDC’s earnings is 19%. This leads to an EPS of $5.26 in the final year of projections relative to the current EPS of $3.1. In 2022, BDC’s profit margin will have expanded from 4.9% to 8.5%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Belden, I’ve put together three pertinent factors you should further research:
- 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 Belden 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 Belden is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Belden? 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 email@example.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.