As Aker BP ASA (OB:AKERBP) released its earnings announcement on 31 December 2018, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 3.3% next year compared with the higher past 5-year average growth rate of 60%. Presently, with latest-twelve-month earnings at US$476m, we should see this growing to US$492m by 2020. Below is a brief commentary on the longer term outlook the market has for Aker BP. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Can we expect Aker BP to keep growing?
The longer term view from the 19 analysts covering AKERBP is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for AKERBP, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$476m and the final forecast of US$849m by 2022, the annual rate of growth for AKERBP’s earnings is 17%. EPS reaches $2.3 in the final year of forecast compared to the current $1.32 EPS today. With a current profit margin of 13%, this movement will result in a margin of 16% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Aker BP, I’ve put together three pertinent factors you should further research:
- 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 Aker BP 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 Aker BP is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Aker BP? 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.