Yahoo Finance Will Port of Tauranga Limited’s (NZSE:POT) Earnings Grow Over The Next Few Years?
Port of Tauranga Limited’s (NZSE:POT) announced its latest earnings update in June 2018, which confirmed that the company benefited from a strong tailwind, eventuating to a double-digit earnings growth of 13.0%. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Port of Tauranga’s earnings growth trajectory 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.
View our latest analysis for Port of Tauranga
Market analysts’ consensus outlook for next year seems rather muted, with earnings climbing by a single digit 7.4%. The growth outlook in the following year seems much more buoyant with rates arriving at double digit 13.1% compared to today’s earnings, and finally hitting NZ$112.1m by 2021.
Although it’s informative knowing the growth rate year by year relative to today’s figure, it may be more beneficial estimating the rate at which the earnings are growing on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Port of Tauranga’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted 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 5.8%. This means that, we can anticipate Port of Tauranga will grow its earnings by 5.8% every year for the next couple of years.
Next Steps:
For Port of Tauranga, I’ve compiled three key aspects you should further research:
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 POT 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 POT is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of POT? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
