In December 2018, Shangri-La Asia Limited (HKG:69) released its earnings update. Generally, analyst consensus outlook appear cautiously optimistic, as a 37% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of -10%. Presently, with latest-twelve-month earnings at US$193m, we should see this growing to US$263m by 2020. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Shangri-La Asia in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
The longer term view from the 5 analysts covering 69 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 reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, 69's earnings should reach US$284m, from current levels of US$193m, resulting in an annual growth rate of 10%. This leads to an EPS of $0.079 in the final year of projections relative to the current EPS of $0.054. Margins are currently sitting at 7.7%, which is expected to expand to 11% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Shangri-La Asia, I've put together 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 Shangri-La Asia 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 Shangri-La Asia is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Shangri-La Asia? 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 firstname.lastname@example.org. 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.