Analysts covering Hyster-Yale Materials Handling Inc (NYSE:HY) are predicting high double-digit earnings per share growth of 79.77% over the following three years. At a current EPS of $3.595, this growth rate means shareholders can expect an impending EPS of $6.463. I am going to look at the latest data on HY to assess whether this expected growth is reasonable. Check out our latest analysis for Hyster-Yale Materials Handling
How is Hyster-Yale Materials Handling going to perform in the future?
Analysts are predicting good growth prospects for Hyster-Yale Materials Handling over the next couple of years. Expectation from the stock’s 4 analysts is one of positive sentiment, with earnings estimated to grow from current levels of $3.595 to $6.463 over the next couple of years. This illustrates a relatively optimistic outlook in the near term, with a relatively solid earnings per share growth rate of 79.77% over the next few years. In the same period we will see the revenue grow from $2,719M to $3,124M and net income is predicted to rise from $59M to $106M in the next couple of years, growing by 79.77%. However, margins look rather unappealing at the current levels of revenue and earnings.
Basis for the growth
The past can be a great indicator for future performance for a stock. We can determine whether this level of expected growth is highly excessive or whether the company has consistently exhibited strength. However, HY’s earnings growth in the past couple of years has been negative at -29.28%. Although its past performance does not bolster the expected positive growth, it could also mean HY is growing off a lower base, meaning a higher growth rate is easier to achieve. This sign change in growth could indicate a turnaround initiative.
For HY, there are three key aspects you should further examine:
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 HY 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 HY is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of HY? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.