On 30 June 2019, Ingevity Corporation (NYSE:NGVT) announced its earnings update. Overall, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 29% in the upcoming year relative to the past 5-year average growth rate of 16%. With trailing-twelve-month net income at current levels of US$169m, we should see this rise to US$218m in 2020. Below is a brief commentary on the longer term outlook the market has for Ingevity. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
The 9 analysts covering NGVT view its longer term outlook with a positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for NGVT, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$169m and the final forecast of US$263m by 2022, the annual rate of growth for NGVT’s earnings is 14%. EPS reaches $6.31 in the final year of forecast compared to the current $4.02 EPS today. In 2022, NGVT's profit margin will have expanded from 15% to 18%.
Future outlook is only one aspect when you're building an investment case for a stock. For Ingevity, I've compiled three relevant 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 Ingevity 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 Ingevity is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ingevity? 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 email@example.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.