Looking at Celanese Corporation's (NYSE:CE) earnings update in December 2018, analyst consensus outlook appear cautiously optimistic, as a 8.6% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 2.7%. With trailing-twelve-month net income at current levels of US$1.2b, we should see this rise to US$1.3b in 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Celanese in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
What can we expect from Celanese in the longer term?
The longer term expectations from the 16 analysts of CE is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of CE's earnings growth over these next few years.
By 2022, CE's earnings should reach US$1.5b, from current levels of US$1.2b, resulting in an annual growth rate of 8.3%. EPS reaches $12.14 in the final year of forecast compared to the current $9.02 EPS today. Margins are currently sitting at 17%, which is expected to expand to 19% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Celanese, I've compiled three key factors 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.
- Valuation: What is Celanese 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 Celanese is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Celanese? 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.