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What Should Investors Know About Charter Hall Long WALE REIT's (ASX:CLW) Earnings Trend?

Simply Wall St

In August 2019, Charter Hall Long WALE REIT (ASX:CLW) announced its latest earnings update, which signalled that the business experienced a major headwind with earnings deteriorating by -17%. Below, I've presented key growth figures on how market analysts perceive Charter Hall Long WALE REIT's earnings growth outlook over the next few years and whether the future looks brighter. 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 Charter Hall Long WALE REIT

Analysts' outlook for next year seems positive, with earnings expanding by a robust 32%. This growth seems to continue into the following year with rates reaching double digit 38% compared to today’s earnings, and finally hitting AU$99m by 2022.

ASX:CLW Past and Future Earnings, September 10th 2019

Although it’s informative knowing the rate of growth each year relative to today’s value, it may be more insightful gauging the rate at which the earnings are rising or falling every year, on average. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Charter Hall Long WALE REIT's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted 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 10%. This means that, we can anticipate Charter Hall Long WALE REIT will grow its earnings by 10% every year for the next few years.

Next Steps:

For Charter Hall Long WALE REIT, I've put together three essential factors you should further examine:

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