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As Giordano International Limited (HKG:709) released its earnings announcement on 31 December 2018, it seems that analyst forecasts are fairly optimistic, with profits predicted to increase by 2.0% next year against the past 5-year average growth rate of -1.2%. With trailing-twelve-month net income at current levels of HK$480m, we should see this rise to HK$490m in 2020. Below is a brief commentary around Giordano International'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.
How is Giordano International going to perform in the near future?
The 3 analysts covering 709 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 709's earnings growth over these next few years.
From the current net income level of HK$480m and the final forecast of HK$585m by 2022, the annual rate of growth for 709’s earnings is 7.5%. EPS reaches HK$0.37 in the final year of forecast compared to the current HK$0.30 EPS today. Margins are currently sitting at 8.7%, which is expected to expand to 9.7% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Giordano International, I've put together three pertinent factors 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 Giordano International 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 Giordano International is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Giordano International? 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.