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Will Hanesbrands Inc.’s (NYSE:HBI) Earnings Grow In The Years Ahead?

Simply Wall St

Hanesbrands Inc.’s (NYSE:HBI) announced its latest earnings update in December 2018, which suggested that the business experienced a significant tailwind, more than doubling its earnings from the prior year. Below, I’ve laid out key numbers on how market analysts predict Hanesbrands’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Hanesbrands

Analysts’ outlook for the upcoming year seems optimistic, with earnings growing by a robust 10%. This growth seems to continue into the following year with rates reaching double digit 21% compared to today’s earnings, and finally hitting US$664m by 2022.

NYSE:HBI Past and Future Earnings, March 3rd 2019

Although it’s useful to understand the growth year by year relative to today’s figure, it may be more beneficial to determine the rate at which the company is rising or falling every year, on average. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Hanesbrands’s earnings trajectory over time, fluctuate up and down. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 7.3%. This means that, we can presume Hanesbrands will grow its earnings by 7.3% every year for the next few years.

Next Steps:

For Hanesbrands, I’ve put together three pertinent factors you should look at:

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