On 31 March 2019, Mapletree Industrial Trust (SGX:ME8U) released its most recent earnings update. Generally, analyst consensus outlook seem pessimistic, as a 6.0% fall in profits is expected in the upcoming year. Though this pessimism is not unfounded, given the 5-year track record of negative growth. Currently with a trailing-twelve-month profit of S$271m, the consensus growth rate suggests that earnings will drop to S$255m by 2020. Below is a brief commentary around Mapletree Industrial Trust's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How is Mapletree Industrial Trust going to perform in the near future?
The 13 analysts covering ME8U view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of ME8U's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of S$271m and the final forecast of S$273m by 2022, the annual rate of growth for ME8U’s earnings is 0.6%. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of SGD0.13 in the final year of forecast compared to the current SGD0.14 EPS today. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 72% to 64% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Mapletree Industrial Trust, there are three essential aspects 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.
- Valuation: What is Mapletree Industrial Trust 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 Mapletree Industrial Trust is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Mapletree Industrial Trust? 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.