Based on Centerra Gold Inc.'s (TSE:CG) earnings update in December 2018, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 14% next year against the higher past 5-year average growth rate of 27%. By 2020, we can expect Centerra Gold’s bottom line to reach US$129m, a jump from the current trailing-twelve-month of US$113m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Centerra Gold in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Centerra Gold going to perform in the near future?
The view from 3 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, CG's earnings should reach US$213m, from current levels of US$113m, resulting in an annual growth rate of 28%. This leads to an EPS of $0.73 in the final year of projections relative to the current EPS of $0.39. Margins are currently sitting at 10%, which is expected to expand to 16% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Centerra Gold, I've compiled three key factors 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 Centerra Gold 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 Centerra Gold is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Centerra Gold? 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.