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People’s United Financial, Inc. (NASDAQ:PBCT): Immense Growth Potential?

Jonathon Baker

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Since People’s United Financial, Inc. (NASDAQ:PBCT) released its earnings in December 2018, the consensus outlook from analysts appear fairly confident, with earnings expected to grow by 17% in the upcoming year against the past 5-year average growth rate of 12%. With trailing-twelve-month net income at current levels of US$454m, we should see this rise to US$530m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for People’s United Financial

What can we expect from People’s United Financial in the longer term?

Longer term expectations from the 7 analysts covering PBCT’s stock 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 get an idea of the overall earnings growth trend for PBCT, 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.

NasdaqGS:PBCT Past and Future Earnings, February 22nd 2019

By 2022, PBCT’s earnings should reach US$614m, from current levels of US$454m, resulting in an annual growth rate of 11%. This leads to an EPS of $1.67 in the final year of projections relative to the current EPS of $1.3. Margins are currently sitting at 29%, which is expected to expand to 30% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For People’s United Financial, I’ve compiled three relevant factors you should look at:

  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 People’s United Financial 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 People’s United Financial is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of People’s United Financial? 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.