Will First Commonwealth Financial Corporation's (NYSE:FCF) Earnings Grow In The Years Ahead?

Simply Wall St

The latest earnings announcement First Commonwealth Financial Corporation (NYSE:FCF) released in December 2018 indicated that the company benefited from a sizeable tailwind, eventuating to a high double-digit earnings growth of 95%. Below is a brief commentary on my key takeaways on how market analysts perceive First Commonwealth Financial's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for First Commonwealth Financial

Analysts' expectations for next year seems rather subdued, with earnings growing by a single digit 0.7%. The following year doesn't look much more exciting, though earnings does reach US$121m in 2022.

NYSE:FCF Past and Future Earnings, April 23rd 2019

Even though it is informative knowing the growth rate year by year relative to today’s value, it may be more beneficial determining the rate at which the earnings are rising or falling on average every year. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of First Commonwealth Financial's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 4.2%. This means, we can presume First Commonwealth Financial will grow its earnings by 4.2% every year for the next few years.

Next Steps:

For First Commonwealth Financial, there are three essential factors you should further examine:

  1. 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.
  2. Valuation: What is FCF 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 FCF is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FCF? 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.