What Should We Expect From China Mobile Limited’s (HKG:941) Earnings Over The Next Few Years?

China Mobile Limited’s (HKG:941) released its most recent earnings update in December 2018, which showed that the company experienced a small tailwind, leading to a single-digit earnings growth of 3.1%. Below, I’ve laid out key growth figures on how market analysts perceive China Mobile’s earnings growth outlook 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.

Check out our latest analysis for China Mobile

Market analysts’ consensus outlook for next year seems rather subdued, with earnings climbing by a single digit 2.3%. The following year doesn’t look much more exciting, though earnings does reach CN¥133b in 2022.

SEHK:941 Past and Future Earnings, March 31st 2019
SEHK:941 Past and Future Earnings, March 31st 2019

Although it is useful to understand the growth rate year by year relative to today’s level, it may be more valuable to analyze the rate at which the company is growing every year, on average. The benefit of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of China Mobile’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve appended 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 3.1%. This means that, we can anticipate China Mobile will grow its earnings by 3.1% every year for the next couple of years.

Next Steps:

For China Mobile, I’ve compiled three key 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 941 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 941 is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 941? 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.