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After Industrias Bachoco, S.A.B. de C.V.’s (NYSE:IBA) earnings announcement on 31 December 2018, the consensus outlook from analysts appear pessimistic, with earnings expected to decline by -6.4% in the upcoming year relative to the past 5-year average growth rate of 12%. Currently with a trailing-twelve-month profit of Mex$3.4b, the consensus growth rate suggests that earnings will drop to Mex$3.2b by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Industrias Bachoco. de going to perform in the near future?
The longer term expectations from the 4 analysts of IBA 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. 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 IBA’s earnings growth over these next few years.
By 2022, IBA’s earnings should reach Mex$4.6b, from current levels of Mex$3.4b, resulting in an annual growth rate of 7.2%. This leads to an EPS of MX$81.91 in the final year of projections relative to the current EPS of MX$68.68. With a current profit margin of 5.6%, this movement will result in a margin of 6.8% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Industrias Bachoco. de, I’ve compiled three key aspects you should further research:
- 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 Industrias Bachoco. de 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 Industrias Bachoco. de is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Industrias Bachoco. de? 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 past 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. For errors that warrant correction please contact the editor at email@example.com.