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In December 2017, Dover Corporation (NYSE:DOV) announced its latest earnings update. Overall, analyst consensus outlook appear bearish, with earnings expected to decline by -1.49% in the upcoming year. However, this is still an improvement on its past 5-year earnings growth rate of -4.64%, on average. Presently, with earnings at US$811.67M, we should see this fall to US$799.55M by 2019. Below is a brief commentary on the longer term outlook the market has for Dover. Investors wanting to learn more about other aspects of the company should research its fundamentals here. See our latest analysis for Dover
Exciting times ahead?
Over the next three years, it seems the consensus view of the 17 analysts covering DOV is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 DOV’s earnings growth over these next few years.
From the current net income level of US$811.67M and the final forecast of US$953.76M by 2021, the annual rate of growth for DOV’s earnings is 5.77%. EPS reaches $6.67 in the final year of forecast compared to the current $5.21 EPS today. The main reason for growth is a result of cost cutting activities, as revenues is expected to grow much slower than earnings. Margins is currently sitting at 10.37%, which is expected to expand to 10.96% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Dover, I’ve put together three key aspects you should further research:
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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.
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Valuation: What is Dover 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 Dover is currently mispriced by the market.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Dover? 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 pass 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.