Will Sands China Ltd.'s (HKG:1928) Earnings Grow In The Years Ahead?
In March 2019, Sands China Ltd. (HKG:1928) released its most recent earnings announcement, which confirmed that the company gained from a robust tailwind, leading to a double-digit earnings growth of 17%. Today I want to provide a brief commentary on how market analysts view Sands China's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Sands China
Market analysts' prospects for the coming year seems buoyant, with earnings rising by a robust 15%. This growth seems to continue into the following year with rates reaching double digit 27% compared to today’s earnings, and finally hitting US$2.6b by 2022.
While it’s informative understanding the rate of growth each year relative to today’s figure, it may be more beneficial to estimate the rate at which the business is rising or falling every year, on average. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of Sands China's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 11%. This means, we can presume Sands China will grow its earnings by 11% every year for the next couple of years.
Next Steps:
For Sands China, I've compiled three pertinent factors you should look at:
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 1928 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 1928 is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1928? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.
