As Super Retail Group Limited (ASX:SUL) announced its earnings release on 29 June 2019, analysts seem cautiously optimistic, with earnings expected to grow by 14% in the upcoming year against the past 5-year average growth rate of 7.2%. With trailing-twelve-month net income at current levels of AU$139m, we should see this rise to AU$158m in 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Can we expect Super Retail Group to keep growing?
The 11 analysts covering SUL view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of SUL’s earnings growth over these next few years.
From the current net income level of AU$139m and the final forecast of AU$165m by 2022, the annual rate of growth for SUL’s earnings is 5.7%. EPS reaches A$0.85 in the final year of forecast compared to the current A$0.71 EPS today. Margins are currently sitting at 5.1%, which is expected to expand to 5.4% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Super Retail Group, I’ve compiled 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 Super Retail 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 Super Retail Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Super Retail 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 email@example.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.