As Silgan Holdings Inc. (NASDAQ:SLGN) released its earnings announcement on 31 December 2018, analysts seem cautiously bearish, as a 5.4% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 9.6%. By 2020, we can expect Silgan Holdings’s bottom line to reach US$236m, a jump from the current trailing-twelve-month of US$224m. Below is a brief commentary around Silgan Holdings’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Can we expect Silgan Holdings to keep growing?
Over the next three years, it seems the consensus view of the 12 analysts covering SLGN is skewed towards the 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.
By 2022, SLGN’s earnings should reach US$272m, from current levels of US$224m, resulting in an annual growth rate of 6.7%. EPS reaches $2.44 in the final year of forecast compared to the current $2.03 EPS today. With a current profit margin of 5.0%, this movement will result in a margin of 5.8% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Silgan Holdings, there are three fundamental 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 Silgan Holdings 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 Silgan Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Silgan Holdings? 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.