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Genting Singapore Limited (SGX:G13): Earnings Growth Remains Elusive

Simply Wall St

Looking at Genting Singapore Limited's (SGX:G13) earnings update in March 2019, analyst forecasts appear to be bearish, with profits predicted to drop by 3.9% next year compared with the past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at S$755m, we should see this fall to S$726m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for Genting Singapore

How will Genting Singapore perform in the near future?

Over the next three years, it seems the consensus view of the 20 analysts covering G13 is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of G13'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.

SGX:G13 Past and Future Earnings, August 1st 2019

This results in an annual growth rate of 3.5% based on the most recent earnings level of S$755m to the final forecast of S$787m by 2022. This leads to an EPS of SGD0.066 in the final year of projections relative to the current EPS of SGD0.063. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 30% to 29% by the end of 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Genting Singapore, I've put together three relevant aspects you should further research:

  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 Genting Singapore 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 Genting Singapore is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Genting Singapore? 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.