Since Odfjell Drilling Ltd. (OB:ODL) released its earnings in March 2019, analyst consensus outlook appear pessimistic, with earnings expected to decline by 17% in the upcoming year relative to the past 5-year average growth rate of 11%. Presently, with latest-twelve-month earnings at US$23m, we should see this fall to US$19m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Odfjell Drilling in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Can we expect Odfjell Drilling to keep growing?
The longer term expectations from the 7 analysts of ODL is tilted towards the 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 reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, ODL’s earnings should reach US$61m, from current levels of US$23m, resulting in an annual growth rate of 44%. EPS reaches $0.42 in the final year of forecast compared to the current $0.10 EPS today. In 2022, ODL’s profit margin will have expanded from 3.3% to 7.4%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Odfjell Drilling, there are three pertinent aspects you should further examine:
- 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 Odfjell Drilling 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 Odfjell Drilling is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Odfjell Drilling? 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.
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