Looking at Ingevity Corporation’s (NYSE:NGVT) earnings update on 30 June 2019, analyst consensus outlook appear cautiously optimistic, as a 29% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 16%. Presently, with latest-twelve-month earnings at US$169m, we should see this growing to US$218m by 2020. Below is a brief commentary on the longer term outlook the market has for Ingevity. For those interested in more of an analysis of the company, you can research its fundamentals here.
What can we expect from Ingevity in the longer term?
The longer term view from the 9 analysts covering NGVT is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around 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, NGVT’s earnings should reach US$263m, from current levels of US$169m, resulting in an annual growth rate of 14%. This leads to an EPS of $6.31 in the final year of projections relative to the current EPS of $4.02. With a current profit margin of 15%, this movement will result in a margin of 18% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Ingevity, I’ve put together three fundamental factors you should further examine:
- 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 Ingevity 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 Ingevity is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ingevity? 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 firstname.lastname@example.org. 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.