What Should We Expect From CTT – Correios De Portugal, S.A.’s (ELI:CTT) Earnings In The Next 12 Months?

As CTT – Correios De Portugal, S.A. (ELI:CTT) announced its earnings release on 30 June 2019, analyst consensus outlook appear cautiously optimistic, as a 24% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of -28%. Presently, with latest-twelve-month earnings at €20m, we should see this growing to €24m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for CTT – Correios De Portugal in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for CTT – Correios De Portugal

Exciting times ahead?

Longer term expectations from the 2 analysts covering CTT’s stock 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 CTT’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.

ENXTLS:CTT Past and Future Earnings, September 15th 2019
ENXTLS:CTT Past and Future Earnings, September 15th 2019

From the current net income level of €20m and the final forecast of €46m by 2022, the annual rate of growth for CTT’s earnings is 26%. This leads to an EPS of €0.33 in the final year of projections relative to the current EPS of €0.13. With a current profit margin of 2.8%, this movement will result in a margin of 6.2% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For CTT – Correios De Portugal, there are three key aspects you should look at:

  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 CTT – Correios De Portugal 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 CTT – Correios De Portugal is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CTT – Correios De Portugal? 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.