As Singapore Airlines Limited (SGX:C6L) released its earnings announcement on 31 March 2019, analyst consensus outlook appear cautiously optimistic, as a 21% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 13%. With trailing-twelve-month net income at current levels of S$683m, we should see this rise to S$825m in 2020. Below is a brief commentary around Singapore Airlines's earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Singapore Airlines going to perform in the near future?
The longer term view from the 14 analysts covering C6L is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. 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.
From the current net income level of S$683m and the final forecast of S$785m by 2022, the annual rate of growth for C6L’s earnings is 4.6%. This leads to an EPS of SGD0.66 in the final year of projections relative to the current EPS of SGD0.58. Margins are currently sitting at 4.2%, approximately the same as previous years. With analysts forecasting revenue growth of 0.13813 and C6L's net income growth expected to roughly track that, this company may add value for shareholders over time.
Future outlook is only one aspect when you're building an investment case for a stock. For Singapore Airlines, I've compiled three important 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.
- Future Earnings: How does Singapore Airlines's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Singapore 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!
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.