U.S. Markets open in 4 hrs 59 mins

What Should We Expect From Mineral Resources Limited's (ASX:MIN) Earnings Over The Next Year?

Simply Wall St

Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!

Based on Mineral Resources Limited's (ASX:MIN) earnings update in December 2018, analysts seem highly optimistic, as a 67% rise in profits is expected in the upcoming year, against the historical 5-year average growth rate of 7.9%. Currently with trailing-twelve-month earnings of AU$272m, we can expect this to reach AU$454m by 2020. Below is a brief commentary on the longer term outlook the market has for Mineral Resources. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for Mineral Resources

How will Mineral Resources perform in the near future?

Longer term expectations from the 6 analysts covering MIN’s stock is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of MIN'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.

ASX:MIN Past and Future Earnings, March 26th 2019

This results in an annual growth rate of 23% based on the most recent earnings level of AU$272m to the final forecast of AU$515m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of A$1.23 in the final year of forecast compared to the current A$1.45 EPS today. With a current profit margin of 17%, this movement will result in a margin of 23% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Mineral Resources, I've compiled three important aspects you should look at:

  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 Mineral Resources 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 Mineral Resources is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Mineral Resources? 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 editorial-team@simplywallst.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.