In September 2018, Fisher & Paykel Healthcare Corporation Limited (NZSE:FPH) announced its earnings update. Overall, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 11% next year against the higher past 5-year average growth rate of 17%. Currently with trailing-twelve-month earnings of NZ$190m, we can expect this to reach NZ$212m by 2020. Below is a brief commentary around Fisher & Paykel Healthcare’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
How is Fisher & Paykel Healthcare going to perform in the near future?
The longer term view from the 9 analysts covering FPH is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for FPH, 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.
This results in an annual growth rate of 14% based on the most recent earnings level of NZ$190m to the final forecast of NZ$287m by 2022. This leads to an EPS of NZ$0.53 in the final year of projections relative to the current EPS of NZ$0.33. In 2022, FPH’s profit margin will have expanded from 19% to 22%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Fisher & Paykel Healthcare, I’ve compiled three key 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 Fisher & Paykel Healthcare 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 Fisher & Paykel Healthcare is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fisher & Paykel Healthcare? 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.