After Expeditors International of Washington, Inc.’s (NASDAQ:EXPD) earnings announcement on 31 December 2018, analysts seem cautiously bearish, with profits predicted to rise by 0.2% next year compared with the higher past 5-year average growth rate of 10%. Currently with trailing-twelve-month earnings of US$618m, we can expect this to reach US$619m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Expeditors International of Washington in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from Expeditors International of Washington in the longer term?
The longer term expectations from the 12 analysts of EXPD is tilted towards the 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 EXPD’s earnings growth over these next few years.
From the current net income level of US$618m and the final forecast of US$705m by 2022, the annual rate of growth for EXPD’s earnings is 3.7%. This leads to an EPS of $4.15 in the final year of projections relative to the current EPS of $3.55. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 7.6% to 7.1% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Expeditors International of Washington, I’ve compiled three essential factors 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 Expeditors International of Washington 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 Expeditors International of Washington is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Expeditors International of Washington? 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.