Will PICC Property and Casualty Company Limited’s (HKG:2328) Earnings Grow Over The Next Year?

On 31 December 2018, PICC Property and Casualty Company Limited (HKG:2328) released its earnings update. Generally, the consensus outlook from analysts appear fairly confident, with earnings expected to grow by 34% in the upcoming year compared with the past 5-year average growth rate of 7.1%. By 2020, we can expect PICC Property and Casualty’s bottom line to reach CN¥21b, a jump from the current trailing-twelve-month of CN¥15b. Below is a brief commentary around PICC Property and Casualty’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

View our latest analysis for PICC Property and Casualty

Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!

What can we expect from PICC Property and Casualty in the longer term?

Longer term expectations from the 22 analysts covering 2328’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

SEHK:2328 Past and Future Earnings, March 24th 2019
SEHK:2328 Past and Future Earnings, March 24th 2019

This results in an annual growth rate of 18% based on the most recent earnings level of CN¥15b to the final forecast of CN¥21b by 2022. This leads to an EPS of CN¥1.15 in the final year of projections relative to the current EPS of CN¥0.70. With a current profit margin of 4.3%, this movement will result in a margin of 4.5% by 2022.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For PICC Property and Casualty, there are three relevant factors you should look at:

  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 PICC Property and Casualty 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 PICC Property and Casualty is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of PICC Property and Casualty? 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.