The most recent earnings update W. P. Carey Inc.'s (NYSE:WPC) released in December 2018 indicated that the business benefited from a strong tailwind, eventuating to a double-digit earnings growth of 49%. Investors may find it useful to understand how market analysts perceive W. P. Carey's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Market analysts' prospects for this coming year seems optimistic, with earnings growing by a robust 34%. This growth seems to continue into the following year with rates reaching double digit 37% compared to today’s earnings, and finally hitting US$981m by 2022.
While it’s useful to be aware of the growth rate each year relative to today’s level, it may be more beneficial to gauge the rate at which the earnings are growing every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of W. P. Carey's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've inserted 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 18%. This means that, we can anticipate W. P. Carey will grow its earnings by 18% every year for the next couple of years.
For W. P. Carey, 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 WPC 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 WPC is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WPC? 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.