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Public Joint Stock Company Aeroflot – Russian Airlines (MCX:AFLT): Set To Experience A Decrease In Earnings?

Neil Montgomery

Based on Public Joint Stock Company Aeroflot – Russian Airlines’s (MCX:AFLT) earnings update in March 2018, analyst consensus outlook seem bearish, as a -0.3% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 14.9%. Presently, with latest-twelve-month earnings at RUруб17.08b, we should see this fall to RUруб17.03b by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Aeroflot – Russian Airlines in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for Aeroflot – Russian Airlines

How is Aeroflot – Russian Airlines going to perform in the near future?

The 12 analysts covering AFLT view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for AFLT, 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.

MISX:AFLT Future Profit August 29th 18

From the current net income level of RUруб22.87b and the final forecast of RUруб40.14b by 2021, the annual rate of growth for AFLT’s earnings is 12.2%. This leads to an EPS of RUB25.5 in the final year of projections relative to the current EPS of RUB21.34. The bottom-line growth seems to be caused by reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. In 2021, AFLT’s profit margin will have expanded from 4.3% to 5.1%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Aeroflot – Russian Airlines, I’ve compiled three pertinent aspects you should further examine:

  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 Aeroflot – Russian Airlines 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 Aeroflot – Russian Airlines is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Aeroflot – Russian Airlines? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.