Westfield Corporation (ASX:WFD) is predicted to shrink its earnings per share by an unfavourable double-digit of -47.72% over the next three years. Presently, with an EPS of A$0.704, we can expect an upcoming EPS of A$0.368. Today I will look at the latest data in order to investigate whether this negative future growth rate is plausible. View our latest analysis for Westfield
Troubled times ahead
There are dark clouds over Westfield’s potential over the next couple of years. Analysts covering the company are expecting the EPS to drop down to A$0.368, a significant decline from previous levels of around A$0.704. In the same period we should see the revenue jump from A$1,268M to A$2,007M and net income is predicted to decline from A$1,464M to A$765M in the next couple of years. However, at this level of revenue and profit, margins are predicted to be extremely healthy.
Is this similar growth to the past?
The past can be a great indicator for future performance for a stock. We can determine whether this level of expected growth is relatively justified or whether the negative sentiment is too pessimistic. WFD is expected to face a massive swing from a previous double-digit growth of 80.82%, over the last five years, to a forecast double-digit decline by analysts. This is highly bearish and may be a sign of an investment period for WFD, incurring higher expense growth than revenue.
Next Steps:
For WFD, I’ve put together three relevant factors you should further research:
1. 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.
2. Valuation: What is WFD 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 WFD is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of WFD? 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.