In May 2018, The Toro Company (NYSE:TTC) announced its earnings update. Overall, analysts seem cautiously optimistic, with earnings expected to grow by 15.81% in the upcoming year relative to the past 5-year average growth rate of 12.77%. By 2019, we can expect Toro’s bottom line to reach US$296.64m, a jump from the current trailing-twelve-month US$256.15m. Below is a brief commentary around Toro’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
How is Toro going to perform in the near future?
The view from 6 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of TTC’s earnings growth over these next few years.
This results in an annual growth rate of 10.86% based on the most recent earnings level of US$267.72m to the final forecast of US$382.64m by 2021. This leads to an EPS of $3.51 in the final year of projections relative to the current EPS of $2.47. Earnings growth appears to be a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. Margins is currently sitting at 10.69%, which is expected to expand to 13.18% by 2021.
Future outlook is only one aspect when you’re building an investment case for a stock. For Toro, I’ve compiled three key aspects you should further examine:
- 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 Toro 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 Toro is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Toro? 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.