In December 2018, ENN Energy Holdings Limited (HKG:2688) announced its earnings update. Overall, analyst consensus outlook appear vastly optimistic, as a 75% rise in profits is expected in the upcoming year, against the historical 5-year average growth rate of 7.4%. Presently, with latest-twelve-month earnings at CN¥2.8b, we should see this growing to CN¥4.9b by 2020. Below is a brief commentary around ENN Energy Holdings’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
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Can we expect ENN Energy Holdings to keep growing?
The view from 26 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To understand the overall trajectory of 2688’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 19% based on the most recent earnings level of CN¥2.8b to the final forecast of CN¥6.5b by 2022. This leads to an EPS of CN¥5.85 in the final year of projections relative to the current EPS of CN¥2.56. Margins are currently sitting at 4.6%, which is expected to expand to 6.2% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For ENN Energy Holdings, 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 ENN Energy Holdings 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 ENN Energy Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ENN Energy Holdings? 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.