After OceanaGold Corporation's (TSE:OGC) recent earnings announcement in December 2018, analyst consensus outlook seem bearish, with profits predicted to drop by -28% next year compared with the past 5-year average growth rate of 33%. Currently with a trailing-twelve-month profit of US$122m, the consensus growth rate suggests that earnings will drop to US$87m by 2020. Below is a brief commentary around OceanaGold'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 will OceanaGold perform in the near future?
Over the next three years, it seems the consensus view of the 13 analysts covering OGC is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for OGC, 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.
By 2022, OGC's earnings should reach US$113m, from current levels of US$122m, resulting in an annual growth rate of 6.9%. This leads to an EPS of $0.24 in the final year of projections relative to the current EPS of $0.20. However, the expansion of the current 16% margin is not expected to be sustained, as it begins to contract to 13% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For OceanaGold, I've compiled three pertinent factors 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 OceanaGold 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 OceanaGold is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of OceanaGold? 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.