What Should We Expect From Ship Finance International Limited’s (NYSE:SFL) Earnings Over The Next Year?

Based on Ship Finance International Limited’s (NYSE:SFL) earnings update on 30 September 2018, analysts seem cautiously optimistic, with earnings expected to grow by 28% in the upcoming year against the past 5-year average growth rate of -1.5%. By 2019, we can expect Ship Finance International’s bottom line to reach US$130m, a jump from the current trailing-twelve-month US$101m. Below is a brief commentary around Ship Finance International’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for Ship Finance International

Can we expect Ship Finance International to keep growing?

The longer term expectations from the 7 analysts of SFL is tilted towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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 SFL’s earnings growth over these next few years.

NYSE:SFL Future Profit December 17th 18
NYSE:SFL Future Profit December 17th 18

By 2021, SFL’s earnings should reach US$158m, from current levels of US$101m, resulting in an annual growth rate of 9.4%. EPS reaches $1.31 in the final year of forecast compared to the current $1.06 EPS today. Margins are currently sitting at 27%, which is expected to expand to 36% by 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Ship Finance International, I’ve put together three relevant factors you should look at:

  1. 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.
  2. Valuation: What is Ship Finance International 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 Ship Finance International is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ship Finance International? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.