As CF Industries Holdings, Inc. (NYSE:CF) released its earnings announcement on 31 March 2019, analysts seem highly optimistic, with earnings expected to grow by a high double-digit of 61% in the upcoming year, against the historical 5-year average growth rate of -41%. Presently, with latest-twelve-month earnings at US$290m, we should see this growing to US$468m by 2020. Below is a brief commentary on the longer term outlook the market has for CF Industries Holdings. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
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What can we expect from CF Industries Holdings in the longer term?
The longer term view from the 18 analysts covering CF 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. 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 CF’s earnings growth over these next few years.
By 2022, CF’s earnings should reach US$625m, from current levels of US$290m, resulting in an annual growth rate of 15%. EPS reaches $3.09 in the final year of forecast compared to the current $1.25 EPS today. In 2022, CF’s profit margin will have expanded from 6.5% to 13%.
Future outlook is only one aspect when you’re building an investment case for a stock. For CF Industries Holdings, I’ve put together three essential aspects you should look at:
- 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 CF Industries 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 CF Industries Holdings is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CF Industries 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 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.