Will Champion Iron Limited's (ASX:CIA) Earnings Grow In The Next 12 Months?
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As Champion Iron Limited (ASX:CIA) announced its earnings release on 31 March 2019, analysts seem highly optimistic, with earnings expected to more than double in the upcoming year, against the historical 5-year average growth rate of 27%. Presently, with latest-twelve-month earnings at CA$83m, we should see this growing to CA$189m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
View our latest analysis for Champion Iron
Exciting times ahead?
The longer term view from the 8 analysts covering CIA is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for CIA, 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 CA$83m and the final forecast of CA$157m by 2022, the annual rate of growth for CIA’s earnings is 9.6%. EPS reaches CA$0.27 in the final year of forecast compared to the current CA$0.20 EPS today. Margins are currently sitting at 13%, which is expected to expand to 23% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Champion Iron, I've compiled three key 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 Champion Iron 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 Champion Iron is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Champion Iron? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.
