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Based on Harris Corporation's (NYSE:HRS) earnings update on 29 March 2019, the consensus outlook from analysts appear fairly confident, with earnings expected to grow by 15% in the upcoming year relative to the past 5-year average growth rate of 14%. By 2020, we can expect Harris’s bottom line to reach US$829m, a jump from the current trailing-twelve-month of US$719m. 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.
Can we expect Harris to keep growing?
The longer term expectations from the 12 analysts of HRS is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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.
This results in an annual growth rate of 9.7% based on the most recent earnings level of US$719m to the final forecast of US$994m by 2022. This leads to an EPS of $11.09 in the final year of projections relative to the current EPS of $6.06. With a current profit margin of 12%, this movement will result in a margin of 13% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Harris, I've put together three relevant 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 Harris 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 Harris is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Harris? 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.