In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
After The Federal Bank Limited's (NSE:FEDERALBNK) earnings announcement on 31 March 2019, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 24% in the upcoming year compared with the past 5-year average growth rate of 7.3%. By 2020, we can expect Federal Bank’s bottom line to reach ₹16b, a jump from the current trailing-twelve-month of ₹13b. Below is a brief commentary around Federal Bank's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for Federal Bank
How is Federal Bank going to perform in the near future?
The 24 analysts covering FEDERALBNK view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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 FEDERALBNK's earnings growth over these next few years.
This results in an annual growth rate of 20% based on the most recent earnings level of ₹13b to the final forecast of ₹27b by 2022. EPS reaches ₹13.57 in the final year of forecast compared to the current ₹6.65 EPS today. Margins are currently sitting at 27%, approximately the same as previous years. With analysts forecasting revenue growth of 0.9488 and FEDERALBNK's net income growth expected to roughly track that, this company may add value for shareholders over time.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Federal Bank, there are three fundamental aspects 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 Federal Bank 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 Federal Bank is currently mispriced by the market.
-
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Federal Bank? 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.