Based on Bunge Limited’s (NYSE:BG) earnings update in March 2019, the consensus outlook from analysts appear highly confident, as a 52% rise in profits is expected in the upcoming year, against the historical 5-year average growth rate of -10%. Currently with trailing-twelve-month earnings of US$223m, we can expect this to reach US$338m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Bunge in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
What can we expect from Bunge in the longer term?
The view from 7 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. 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 24% based on the most recent earnings level of US$223m to the final forecast of US$542m by 2022. EPS reaches $4.94 in the final year of forecast compared to the current $1.58 EPS today. Margins are currently sitting at 0.5%, which is expected to expand to 1.1% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Bunge, I’ve compiled three important factors 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 Bunge 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 Bunge is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Bunge? 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.