Based on Zions Bancorporation, National Association’s (NASDAQ:ZION) recently announced earnings update on 31 December 2018, analyst forecasts seem pessimistic, with profits predicted to drop by -0.6% next year against the past 5-year average growth rate of 26%. Presently, with latest-twelve-month earnings at US$845m, we should see this fall to US$840m by 2020. Below is a brief commentary around Zions Bancorporation National Association’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
The 21 analysts covering ZION view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of ZION’s earnings growth over these next few years.
From the current net income level of US$845m and the final forecast of US$869m by 2022, the annual rate of growth for ZION’s earnings is 0.7%. EPS reaches $5.43 in the final year of forecast compared to the current $4.36 EPS today. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 30% to 28% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Zions Bancorporation National Association, I’ve put together three pertinent 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 Zions Bancorporation National Association 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 Zions Bancorporation National Association is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Zions Bancorporation National Association? 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.