What Do Analysts Think About Inter Pipeline Ltd.’s (TSE:IPL) Future?
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After Inter Pipeline Ltd.’s (TSE:IPL) earnings announcement on 31 December 2018, the consensus outlook from analysts appear bearish, with earnings expected to decline by -17% in the upcoming year against the past 5-year average growth rate of 23%. Presently, with latest-twelve-month earnings at CA$593m, we should see this fall to CA$492m by 2020. Below is a brief commentary on the longer term outlook the market has for Inter Pipeline. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for Inter Pipeline
Can we expect Inter Pipeline to keep growing?
Over the next three years, it seems the consensus view of the 7 analysts covering IPL is skewed towards the negative 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 IPL’s earnings growth over these next few years.
By 2022, IPL’s earnings should reach CA$533m, from current levels of CA$593m, resulting in an annual growth rate of -4.3%. EPS reaches CA$1.29 in the final year of forecast compared to the current CA$1.53 EPS today. The main reason for IPL’s earnings contraction is cost outpacing top line growth of 5.0% over the next few years. With this high cost growth, margins is expected to contract from 23% to 20% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Inter Pipeline, I’ve compiled three relevant 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.
Management:Have insiders been ramping up their shares to take advantage of the market’s sentiment for Inter Pipeline’s future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Inter 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 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. On rare occasion, data errors may occur. Thank you for reading.
