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ITT Inc. (NYSE:ITT): Poised For Long-Term Success?

Blake Harford

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The latest earnings announcement ITT Inc. (NYSE:ITT) released in December 2018 showed that the business experienced a significant tailwind, more than doubling its earnings from the prior year. Below, I’ve presented key growth figures on how market analysts perceive ITT’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for ITT

Analysts’ outlook for this coming year seems pessimistic, with earnings decreasing by a double-digit -13%. However, the next few years show a contrast, with earnings growth becoming positive in 2021, with the bottom line increasing to US$362m in 2022.

NYSE:ITT Past and Future Earnings, February 25th 2019

Although it is helpful to understand the growth each year relative to today’s level, it may be more beneficial to estimate the rate at which the company is rising or falling on average every year. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of ITT’s earnings trajectory over time, which may be more relevant for long term investors. To calculate 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 3.9%. This means that, we can anticipate ITT will grow its earnings by 3.9% every year for the next couple of years.

Next Steps:

For ITT, I’ve compiled three pertinent aspects 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 ITT 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 ITT is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ITT? 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.