What Are Analysts Saying About Star Cement Limited's (NSE:STARCEMENT) Future?
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After Star Cement Limited's (NSE:STARCEMENT) earnings announcement in March 2019, analyst forecasts seem fairly subdued, with profits predicted to rise by 19% next year against the higher past 5-year average growth rate of 31%. With trailing-twelve-month net income at current levels of ₹3.0b, we should see this rise to ₹3.6b in 2020. Below is a brief commentary around Star Cement's earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
See our latest analysis for Star Cement
How is Star Cement going to perform in the near future?
Over the next three years, it seems the consensus view of the 6 analysts covering STARCEMENT is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for STARCEMENT, 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.
From the current net income level of ₹3.0b and the final forecast of ₹5.5b by 2022, the annual rate of growth for STARCEMENT’s earnings is 17%. EPS reaches ₹12.99 in the final year of forecast compared to the current ₹7.13 EPS today. With a current profit margin of 16%, this movement will result in a margin of 18% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Star Cement, I've put together three relevant aspects you should further research:
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 Star Cement 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 Star Cement is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Star Cement? 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 editorial-team@simplywallst.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.
