Rogers Communications Inc.’s (TSE:RCI.B) latest earnings update in December 2018 showed that the company gained from a robust tailwind, eventuating to a double-digit earnings growth of 20%. Below, I’ve laid out key growth figures on how market analysts perceive Rogers Communications’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
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Market analysts’ prospects for the coming year seems positive, with earnings expanding by a robust 13%. This growth seems to continue into the following year with rates arriving at double digit 22% compared to today’s earnings, and finally hitting CA$2.5b by 2022.
Although it’s useful to understand the growth rate each year relative to today’s level, it may be more beneficial to gauge the rate at which the company is growing on average every year. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of Rogers Communications’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 8.4%. This means, we can anticipate Rogers Communications will grow its earnings by 8.4% every year for the next few years.
Next Steps:
For Rogers Communications, I’ve compiled three fundamental aspects you should look at:
- 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 RCI.B 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 RCI.B is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of RCI.B? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.