Oshkosh Corporation’s (NYSE:OSK) most recent earnings update in September 2018 signalled that the business experienced a strong tailwind, eventuating to a high double-digit earnings growth of 65%. Investors may find it useful to understand how market analysts perceive Oshkosh’s earnings growth trajectory over the next couple of 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.
Analysts’ outlook for next year seems rather subdued, with earnings increasing by a single digit 6.7%. The growth outlook in the following year seems much more positive with rates arriving at double digit 13% compared to today’s earnings and reduces to US$478m by 2022.
Although it’s helpful to be aware of the growth rate each year relative to today’s figure, it may be more valuable to analyze the rate at which the earnings are growing on average every year. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Oshkosh’s earnings trajectory over time, be more volatile. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 3.3%. This means that, we can anticipate Oshkosh will grow its earnings by 3.3% every year for the next couple of years.
For Oshkosh, 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 OSK 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 OSK is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of OSK? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.