Looking at Regis Resources Limited's (ASX:RRL) earnings update in December 2018, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 7.0% next year compared with the higher past 5-year average growth rate of 42%. By 2020, we can expect Regis Resources’s bottom line to reach AU$186m, a jump from the current trailing-twelve-month of AU$174m. Below is a brief commentary on the longer term outlook the market has for Regis Resources. For those interested in more of an analysis of the company, you can research its fundamentals here.
How is Regis Resources going to perform in the near future?
The 13 analysts covering RRL view its longer term outlook with a 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 get an idea of the overall earnings growth trend for RRL, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of AU$174m and the final forecast of AU$233m by 2022, the annual rate of growth for RRL’s earnings is 10%. This leads to an EPS of A$0.44 in the final year of projections relative to the current EPS of A$0.35. Margins are currently sitting at 29%, approximately the same as previous years. With analysts forecasting revenue growth of 0.36991 and RRL's net income growth expected to roughly track that, this company may add value for shareholders over time.
Future outlook is only one aspect when you're building an investment case for a stock. For Regis Resources, I've compiled three relevant aspects 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 Regis 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 Regis Resources is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Regis 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 email@example.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.