The latest earnings update Keppel Telecommunications & Transportation Ltd’s (SGX:K11) released in December 2017 suggested that the company experienced a immense headwind with earnings declining by -50.72%. Below, I’ve laid out key numbers on how market analysts perceive Keppel Telecommunications & Transportation’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. See our latest analysis for Keppel Telecommunications & Transportation
Analysts’ expectations for the coming year seems rather subdued, with earnings expanding by a single digit 0.42%. The following year doesn’t look much more exciting, though earnings does reach S$53.00M in 2021.
Although it is useful to be aware of the growth rate each year relative to today’s level, it may be more beneficial estimating the rate at which the company is moving every year, on average. The benefit of this approach is that we can get a better picture of the direction of Keppel Telecommunications & Transportation’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To calculate this rate, I’ve inserted 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 0.70%. This means, we can assume Keppel Telecommunications & Transportation will grow its earnings by 0.70% every year for the next couple of years.
Next Steps:
For Keppel Telecommunications & Transportation, there are three fundamental factors you should further research:
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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 K11 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 K11 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 K11? 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 pass 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.