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Since Tempur Sealy International, Inc. (NYSE:TPX) released its earnings in September 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 41% in the upcoming year against the past 5-year average growth rate of 14%. Currently with trailing-twelve-month earnings of US$151m, we can expect this to reach US$214m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Tempur Sealy International in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Tempur Sealy International to keep growing?
The view from 11 analysts over the next three years 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 get an idea of the overall earnings growth trend for TPX, 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.
From the current net income level of US$151m and the final forecast of US$273m by 2022, the annual rate of growth for TPX’s earnings is 15%. This leads to an EPS of $4.58 in the final year of projections relative to the current EPS of $2.8. Margins are currently sitting at 5.5%, which is expected to expand to 9.2% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Tempur Sealy International, I’ve put together 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.
- Valuation: What is Tempur Sealy International 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 Tempur Sealy International is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Tempur Sealy International? 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 firstname.lastname@example.org.