Yahoo Finance Will The New Zealand Refining Company Limited’s (NZSE:NZR) Earnings Grow In The Years Ahead?
The most recent earnings update The New Zealand Refining Company Limited’s (NZSE:NZR) released in December 2017 indicated that the business gained from a strong tailwind, leading to a high double-digit earnings growth of 66.46%. Today I want to provide a brief commentary on how market analysts predict New Zealand Refining’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for New Zealand Refining
Market analysts’ prospects for this coming year seems pessimistic, with earnings reducing by a double-digit -28.32%. In the following year, earnings begin to improve, but face another fall in 2021 with earnings reaching NZ$73.05m.
Although it is informative understanding the growth rate year by year relative to today’s value, it may be more beneficial gauging the rate at which the earnings are moving every year, on average. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of New Zealand Refining’s earnings trajectory over time, be more volatile. To calculate this rate, I put 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 1.92%. This means that, we can expect New Zealand Refining will grow its earnings by 1.92% every year for the next couple of years.
Next Steps:
For New Zealand Refining, there are three pertinent 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 NZR 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 NZR is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NZR? 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 pass 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.
