What Should We Expect From EVRAZ plc’s (LON:EVR) Earnings In The Next Couple Of Years?

The latest earnings release EVRAZ plc’s (LON:EVR) announced in December 2017 indicated that the company finally turned profitable after delivering losses on average over the last few years. Below, I’ve presented key growth figures on how market analysts view EVRAZ’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. View out our latest analysis for EVRAZ

Analysts’ outlook for next year seems optimistic, with earnings growth more than doubling. Growth seems to drop off in the next couple of years, though still hovering at a double-digit compared to today’s earnings level, generating UK£1.02b in 2021.

LSE:EVR Future Profit June 13th 18
LSE:EVR Future Profit June 13th 18

Although it’s informative knowing the rate of growth year by year relative to today’s level, it may be more insightful to gauge the rate at which the company is moving on average every year. The advantage of this method is that we can get a better picture of the direction of EVRAZ’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To calculate this rate, I put 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 2.15%. This means, we can assume EVRAZ will grow its earnings by 2.15% every year for the next couple of years.

Next Steps:

For EVRAZ, there are three important aspects you should further examine:

  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 EVR 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 EVR is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EVR? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!