As Jardine Cycle & Carriage Limited (SGX:C07) released its earnings announcement on 31 December 2018, it seems that analyst forecasts are substantially optimistic, with a bottom line expansion of more than 100% in the upcoming year, relative to the historical 5-year average growth rate of -7.8%. Presently, with latest-twelve-month earnings at US$420m, we should see this growing to US$909m by 2020. Below is a brief commentary around Jardine Cycle & Carriage’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Jardine Cycle & Carriage perform in the near future?
The longer term expectations from the 6 analysts of C07 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 understand the overall trajectory of C07’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, C07’s earnings should reach US$1.0b, from current levels of US$420m, resulting in an annual growth rate of 32%. This leads to an EPS of $2.6 in the final year of projections relative to the current EPS of $1.06. With a current profit margin of 2.2%, this movement will result in a margin of 4.8% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Jardine Cycle & Carriage, I’ve compiled three important 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 Jardine Cycle & Carriage 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 Jardine Cycle & Carriage is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Jardine Cycle & Carriage? 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.