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Since Far East Horizon Limited (HKG:3360) released its earnings in December 2018, analyst consensus outlook appear cautiously optimistic, as a 17% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 14%. By 2020, we can expect Far East Horizon’s bottom line to reach CN¥4.6b, a jump from the current trailing-twelve-month of CN¥3.9b. Below is a brief commentary on the longer term outlook the market has for Far East Horizon. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
What can we expect from Far East Horizon in the longer term?
The view from 6 analysts over the next three years 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. To get an idea of the overall earnings growth trend for 3360, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
By 2022, 3360's earnings should reach CN¥6.0b, from current levels of CN¥3.9b, resulting in an annual growth rate of 14%. This leads to an EPS of CN¥1.53 in the final year of projections relative to the current EPS of CN¥1.02. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 16% to 12% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Far East Horizon, I've compiled three important 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 Far East Horizon 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 Far East Horizon is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Far East Horizon? 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.