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In December 2018, Centamin plc (LON:CEY) announced its earnings update. Overall, analyst consensus outlook appear cautiously subdued, as a 1.0% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 1.5%. Presently, with latest-twelve-month earnings at US$75m, we should see this growing to US$76m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Centamin in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Centamin perform in the near future?
The view from 12 analysts over the next three years 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. 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 CEY's earnings growth over these next few years.
From the current net income level of US$75m and the final forecast of US$95m by 2022, the annual rate of growth for CEY’s earnings is 7.4%. EPS reaches $0.083 in the final year of forecast compared to the current $0.065 EPS today. With a current profit margin of 12%, this movement will result in a margin of 13% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Centamin, I've compiled three key aspects 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 Centamin 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 Centamin is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Centamin? 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.