What Should We Expect From Fletcher Building Limited's (NZSE:FBU) Earnings Over The Next Year?

Looking at Fletcher Building Limited's (NZSE:FBU) earnings update in December 2018, analysts seem fairly confident, with earnings expected to grow by 45% in the upcoming year compared with the past 5-year average growth rate of -33%. Currently with trailing-twelve-month earnings of -NZ$190.0m, we can expect this to reach -NZ$275.8m by 2020. Below is a brief commentary around Fletcher Building's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

Check out our latest analysis for Fletcher Building

Exciting times ahead?

Over the next three years, it seems the consensus view of the 13 analysts covering FBU is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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.

This results in an annual growth rate of 4.0% based on the most recent earnings level of -NZ$190.0m to the final forecast of -NZ$293.2m by 2022. EPS reaches NZ$0.43 in the final year of forecast compared to the current NZ$-0.26 EPS today. With a current profit margin of -2.0%, this movement will result in a margin of -3.7% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Fletcher Building, I've put together three important 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 Fletcher Building 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 Fletcher Building is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fletcher Building? 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.