Will Gildan Activewear Inc’s (TSE:GIL) Earnings Grow In The Next 12 Months?
After Gildan Activewear Inc’s (TSX:GIL) earnings announcement in December 2017, the consensus outlook from analysts appear in-line with its track record, as upcoming earnings growth is expected to be 10.39% next year, similar to the range of average earnings growth for the past five years of 10.46% per year. With net income at current levels of US$362.33M, we should see this rise to US$399.99M in 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Gildan Activewear in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here. View our latest analysis for Gildan Activewear
How will Gildan Activewear perform in the near future?
The longer term view from the 14 analysts covering GIL is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$362.33M and the final forecast of US$425.03M by 2021, the annual rate of growth for GIL’s earnings is 7.03%. EPS reaches $2.1 in the final year of forecast compared to the current $1.62 EPS today. Growth in earnings appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 13.17%, this movement will result in a margin of 14.15% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Gildan Activewear, I’ve put together three pertinent aspects you should further examine:
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 Gildan Activewear 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 Gildan Activewear is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Gildan Activewear? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
