Looking at Ameren Corporation's (NYSE:AEE) earnings update in December 2018, it seems that analyst expectations are fairly bearish, with profits predicted to rise by -0.8% next year against the higher past 5-year average growth rate of 4.2%. By 2020, we can expect Ameren’s bottom line to reach US$809m, a jump from the current trailing-twelve-month of US$815m. Below is a brief commentary on the longer term outlook the market has for Ameren. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
Longer term expectations from the 8 analysts covering AEE’s stock is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly 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.
From the current net income level of US$815m and the final forecast of US$977m by 2022, the annual rate of growth for AEE’s earnings is 6.3%. This leads to an EPS of $3.84 in the final year of projections relative to the current EPS of $3.34. With a current profit margin of 14%, this movement will result in a margin of 14% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Ameren, I've compiled three pertinent aspects you should look at:
- 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.
- Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for Ameren's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ameren? 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.