What Do Investors Need To Know About Ensco plc’s (NYSE:ESV) Growth?
Ensco plc’s (NYSE:ESV) latest earnings announcement in December 2017 suggested that the company entered the red zone with earnings dropping into the negative territory due to recent headwinds. Below, I’ve laid out key growth figures on how market analysts view Ensco’s earnings growth outlook over the next couple of 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. View our latest analysis for Ensco
Analysts’ outlook for this coming year seems pessimistic, with earnings becoming even more negative, arriving at -US$429.49M in 2019. However, earnings should move into an upward trend, generating -US$415.17M in 2020, and -US$377.29M in 2021.
While it’s useful to be aware of the growth rate year by year relative to today’s level, it may be more insightful gauging the rate at which the earnings are rising or falling on average every year. The pro of this technique is that we can get a better picture of the direction of Ensco’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. 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 -2.84%. This means that, we can expect Ensco will chip away at a rate of -2.84% every year for the next few years.
Next Steps:
For Ensco, there are three important 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.
Future Earnings: How does ESV’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ESV? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
