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Huntsman Corporation (NYSE:HUN): Poised For Long Term Success?

Simply Wall St

After Huntsman Corporation's (NYSE:HUN) earnings announcement on 30 June 2019, analysts seem cautiously bearish, as a 7.1% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 19%. With trailing-twelve-month net income at current levels of US$532m, we should see this rise to US$570m in 2020. Below is a brief commentary around Huntsman'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.

View our latest analysis for Huntsman

Can we expect Huntsman to keep growing?

The longer term expectations from the 12 analysts of HUN is tilted 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 get an idea of the overall earnings growth trend for HUN, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:HUN Past and Future Earnings, August 15th 2019

From the current net income level of US$532m and the final forecast of US$646m by 2022, the annual rate of growth for HUN’s earnings is 8.1%. EPS reaches $2.85 in the final year of forecast compared to the current $2.23 EPS today. Margins are currently sitting at 5.7%, which is expected to expand to 6.8% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Huntsman, there are three relevant aspects 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 Huntsman 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 Huntsman is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Huntsman? 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.