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Based on Pembina Pipeline Corporation's (TSE:PPL) earnings update in March 2019, it seems that analyst expectations are fairly bearish, with earnings expected to grow by 12% in the upcoming year relative to the higher past 5-year average growth rate of 31%. Currently with trailing-twelve-month earnings of CA$1.2b, we can expect this to reach CA$1.3b by 2020. Below is a brief commentary around Pembina Pipeline'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.
How is Pembina Pipeline going to perform in the near future?
Longer term expectations from the 11 analysts covering PPL’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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 PPL's earnings growth over these next few years.
By 2022, PPL's earnings should reach CA$1.6b, from current levels of CA$1.2b, resulting in an annual growth rate of 11%. EPS reaches CA$2.97 in the final year of forecast compared to the current CA$2.28 EPS today. In 2022, PPL's profit margin will have expanded from 16% to 20%.
Future outlook is only one aspect when you're building an investment case for a stock. For Pembina Pipeline, I've compiled three important 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 Pembina Pipeline 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 Pembina Pipeline is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Pembina Pipeline? 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.