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Based on Seplat Petroleum Development Company Plc’s (LON:SEPL) earnings update on 31 December 2018, analyst consensus outlook appear vastly optimistic, with earnings expected to grow by a high double-digit of 62% in the upcoming year, relative to the past 5-year average growth rate of -22%. With trailing-twelve-month net income at current levels of US$147m, we should see this rise to US$238m in 2020. Below is a brief commentary on the longer term outlook the market has for Seplat Petroleum Development. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Seplat Petroleum Development
How is Seplat Petroleum Development going to perform in the near future?
Over the next three years, it seems the consensus view of the 3 analysts covering SEPL is skewed towards the positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, SEPL’s earnings should reach US$204m, from current levels of US$147m, resulting in an annual growth rate of 1.0%. EPS reaches $0.34 in the final year of forecast compared to the current $0.26 EPS today. Analysts are predicting earnings growth to outpace revenue by the end of 2022, resulting in a margin expansion from 20% to 22%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Seplat Petroleum Development, I’ve compiled three pertinent 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 Seplat Petroleum Development 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 Seplat Petroleum Development 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 Seplat Petroleum Development? 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.