What Should We Expect From The Estée Lauder Companies Inc.’s (NYSE:EL) Earnings Over The Next Year?
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Based on The Estée Lauder Companies Inc.’s (NYSE:EL) earnings update on 31 December 2018, analysts seem fairly confident, with earnings expected to grow by 15% in the upcoming year compared with the past 5-year average growth rate of 3.4%. With trailing-twelve-month net income at current levels of US$1.1b, we should see this rise to US$1.3b 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.
Check out our latest analysis for Estée Lauder Companies
What can we expect from Estée Lauder Companies in the longer term?
The view from 26 analysts over the next three years 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 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.
This results in an annual growth rate of 9.6% based on the most recent earnings level of US$1.1b to the final forecast of US$1.5b by 2022. EPS reaches $6.34 in the final year of forecast compared to the current $3.01 EPS today. In 2022, EL’s profit margin will have expanded from 8.1% to 9.4%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Estée Lauder Companies, there are three pertinent factors you should look at:
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 Estée Lauder Companies 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 Estée Lauder Companies is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Estée Lauder Companies? 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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