How Do Analysts See Hubbell Incorporated (NYSE:HUBB) Performing In The Years Ahead?

In December 2018, Hubbell Incorporated (NYSE:HUBB) announced its most recent earnings update, which showed that the business benefited from a robust tailwind, leading to a double-digit earnings growth of 48%. Below is a brief commentary on my key takeaways on how market analysts perceive Hubbell’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Hubbell

Analysts’ outlook for the upcoming year seems optimistic, with earnings increasing by a robust 12%. This growth seems to continue into the following year with rates reaching double digit 23% compared to today’s earnings, and finally hitting US$469m by 2022.

NYSE:HUBB Past and Future Earnings, March 12th 2019
NYSE:HUBB Past and Future Earnings, March 12th 2019

Although it is helpful to be aware of the growth each year relative to today’s level, it may be more valuable analyzing the rate at which the company is growing every year, on average. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of Hubbell’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 9.2%. This means, we can presume Hubbell will grow its earnings by 9.2% every year for the next couple of years.

Next Steps:

For Hubbell, I’ve compiled three important factors you should further research:

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