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Since Fosun International Limited (HKG:656) released its earnings in December 2018, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 12% next year against the higher past 5-year average growth rate of 19%. By 2020, we can expect Fosun International’s bottom line to reach CN¥15b, a jump from the current trailing-twelve-month of CN¥13b. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for Fosun International
What can we expect from Fosun International in the longer term?
The longer term view from the 10 analysts covering 656 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. To understand the overall trajectory of 656's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
From the current net income level of CN¥13b and the final forecast of CN¥17b by 2022, the annual rate of growth for 656’s earnings is 8.0%. This leads to an EPS of CN¥1.96 in the final year of projections relative to the current EPS of CN¥1.57. This high rate of growth of revenue squeezes margins, as analysts predict an upcoming margin contraction from the current 12% to 11% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Fosun International, I've put together three essential aspects you should look at:
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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 Fosun International 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 Fosun International 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 Fosun International? 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 editorial-team@simplywallst.com. 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.