What Should We Expect From Fortis Inc.'s (TSE:FTS) Earnings Over The Next Year?
Looking at Fortis Inc.'s (TSE:FTS) earnings update in December 2018, the consensus outlook from analysts appear somewhat bearish, with profits predicted to rise by 8.6% next year relative to the higher past 5-year average growth rate of 24%. Presently, with latest-twelve-month earnings at CA$1.1b, we should see this growing to CA$1.2b by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.
See our latest analysis for Fortis
Exciting times ahead?
The longer term expectations from the 14 analysts of FTS is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of FTS's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 4.9% based on the most recent earnings level of CA$1.1b to the final forecast of CA$1.3b by 2022. This leads to an EPS of CA$2.9 in the final year of projections relative to the current EPS of CA$2.59. By the end of 2022, analysts are expecting earnings to outpace revenue, and margins to expand from the current 13% to 13%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Fortis, I've compiled three essential 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.
Valuation: What is Fortis 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 Fortis is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fortis? 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.
