Keppel Corporation Limited (SGX:BN4): Earnings To Drop Next Year
Looking at Keppel Corporation Limited’s (SGX:BN4) recent earnings update on 31 December 2018, analyst consensus outlook appear pessimistic, with earnings expected to decline by -4.4% in the upcoming year. Though compared to its 5-year track record of the average earnings growth rate of -30%, this is still an improvement. Presently, with latest-twelve-month earnings at S$944m, we should see this fall to S$902m by 2020. Below is a brief commentary around Keppel’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.
Check out our latest analysis for Keppel
How will Keppel perform in the near future?
Longer term expectations from the 13 analysts covering BN4’s stock 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 BN4’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 S$944m and the final forecast of S$1.1b by 2022, the annual rate of growth for BN4’s earnings is 8.6%. This leads to an EPS of SGD0.63 in the final year of projections relative to the current EPS of SGD0.52. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 16% to 14% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Keppel, I’ve put together 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.
Future Earnings: How does Keppel’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Keppel? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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