Will Shopping Centres Australasia Property Group’s (ASX:SCP) Earnings Grow In The Next 12 Months?

On 30 June 2019, Shopping Centres Australasia Property Group (ASX:SCP) announced its earnings update. Overall, it seems that analyst forecasts are substantially optimistic, with earnings expected to grow by a high double-digit of 56% in the upcoming year, against the previous 5-year average growth rate of 3.4%. Currently with trailing-twelve-month earnings of AU$110m, we can expect this to reach AU$171m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Shopping Centres Australasia Property Group in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Shopping Centres Australasia Property Group

What can we expect from Shopping Centres Australasia Property Group in the longer term?

The 7 analysts covering SCP view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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.

ASX:SCP Past and Future Earnings, August 7th 2019
ASX:SCP Past and Future Earnings, August 7th 2019

By 2022, SCP’s earnings should reach AU$188m, from current levels of AU$110m, resulting in an annual growth rate of 15%. EPS reaches A$0.17 in the final year of forecast compared to the current A$0.13 EPS today. With a current profit margin of 40%, this movement will result in a margin of 61% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Shopping Centres Australasia Property Group, I’ve put together three key aspects you should look at:

  1. 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.
  2. Valuation: What is Shopping Centres Australasia Property Group 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 Shopping Centres Australasia Property Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Shopping Centres Australasia Property Group? 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.