In December 2018, Hubbell Incorporated (NYSE:HUBB) released its earnings update. Generally, analysts seem cautiously optimistic, with earnings expected to grow by 12% in the upcoming year compared with the past 5-year average growth rate of -3.3%. Presently, with latest-twelve-month earnings at US$359m, we should see this growing to US$402m by 2020. Below is a brief commentary on the longer term outlook the market has for Hubbell. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How is Hubbell going to perform in the near future?
The view from 6 analysts over the next three years 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. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of HUBB’s earnings growth over these next few years.
This results in an annual growth rate of 9.2% based on the most recent earnings level of US$359m to the final forecast of US$469m by 2022. This leads to an EPS of $8.44 in the final year of projections relative to the current EPS of $6.57. In 2022, HUBB’s profit margin will have expanded from 8.0% to 9.6%.
Future outlook is only one aspect when you’re building an investment case for a stock. For Hubbell, I’ve put together three essential 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 Hubbell 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 Hubbell is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Hubbell? 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.