Looking at The Travelers Companies, Inc.’s (NYSE:TRV) earnings update on 31 December 2018, analysts seem cautiously optimistic, with earnings expected to grow by 17% in the upcoming year against the past 5-year average growth rate of -12%. With trailing-twelve-month net income at current levels of US$2.5b, we should see this rise to US$2.9b in 2020. Below is a brief commentary around Travelers Companies’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Travelers Companies perform in the near future?
The 14 analysts covering TRV view its longer term outlook with a 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 TRV’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.
By 2022, TRV’s earnings should reach US$3.0b, from current levels of US$2.5b, resulting in an annual growth rate of 7.0%. This leads to an EPS of $12.56 in the final year of projections relative to the current EPS of $9.36. Margins are currently sitting at 8.3%, which is expected to expand to 10.0% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Travelers Companies, I’ve compiled three pertinent aspects 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 Travelers Companies 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 Travelers Companies is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Travelers Companies? 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 firstname.lastname@example.org. 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.