How Do Analysts See Saracen Mineral Holdings Limited (ASX:SAR) Performing In The Next 12 Months?
In June 2018, Saracen Mineral Holdings Limited (ASX:SAR) released its earnings update. Generally, analysts seem extremely confident, as a 62.4% rise in profits is expected in the upcoming year, relative to the historical 5-year average growth rate of 34.0%. By 2019, we can expect Saracen Mineral Holdings’s bottom line to reach AU$122.8m, a jump from the current trailing-twelve-month AU$75.6m. Below is a brief commentary around Saracen Mineral Holdings’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for Saracen Mineral Holdings
Exciting times ahead?
The longer term view from the 5 analysts covering SAR 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 SAR, 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.
By 2021, SAR’s earnings should reach AU$163.6m, from current levels of AU$75.6m, resulting in an annual growth rate of 22.5%. This leads to an EPS of A$0.20 in the final year of projections relative to the current EPS of A$0.093. The main reason for growth is a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. In 2021, SAR’s profit margin will have expanded from 14.8% to 24.3%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Saracen Mineral Holdings, there are three pertinent 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 Saracen Mineral Holdings 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 Saracen Mineral Holdings is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Saracen Mineral Holdings? 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 editorial-team@simplywallst.com.