In This Article:
The most recent earnings announcement Frasers Hospitality Trust’s (SGX:ACV) released in September 2018 revealed that the company experienced a significant headwind with earnings deteriorating by -59%. Below, I’ve laid out key growth figures on how market analysts predict Frasers Hospitality Trust’s earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
View our latest analysis for Frasers Hospitality Trust
Market analysts’ consensus outlook for next year seems buoyant, with earnings rising by a robust 31%. This growth seems to continue into the following year with rates arriving at double digit 39% compared to today’s earnings, and finally hitting S$90m by 2021.
While it is helpful to understand the growth each year relative to today’s figure, it may be more valuable gauging the rate at which the company is rising or falling every year, on average. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Frasers Hospitality Trust’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 11%. This means, we can presume Frasers Hospitality Trust will grow its earnings by 11% every year for the next couple of years.
Next Steps:
For Frasers Hospitality Trust, there are three relevant 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 ACV 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 ACV 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 ACV? 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.