Kinross Gold Corporation (TSE:K): What Does The Future Look Like?
The latest earnings update Kinross Gold Corporation’s (TSX:K) released in December 2017 showed that the business finally turned profitable after delivering losses on average over the past couple of years. Investors may find it useful to understand how market analysts perceive Kinross Gold’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Kinross Gold
Analysts’ outlook for next year seems pessimistic, with earnings falling by a double-digit -32.75%. Over the medium term, earnings are expected to continue to be below today’s level, with a decline of -51.58% in 2020, eventually reaching US$215.64M in 2021.
Although it is helpful to understand the growth each year relative to today’s value, it may be more beneficial to analyze the rate at which the company is rising or falling on average every year. The pro of this method is that we can get a bigger picture of the direction of Kinross Gold’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute 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 -14.15%. This means, we can presume Kinross Gold will chip away at a rate of -14.15% every year for the next couple of years.
Next Steps:
For Kinross Gold, I’ve put together three relevant aspects 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 K 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 K is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of K? 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.
