Yahoo Finance Singapore Airlines Limited (SGX:C6L): Are Analysts Right About The Drop In Earnings?
In March 2018, Singapore Airlines Limited (SGX:C6L) announced its latest earnings update. Overall, the consensus outlook from analysts appear bearish, with earnings expected to decline by -1.20% in the upcoming year against the past 5-year average growth rate of 5.62%. Currently with a profit of S$892.90M, the consensus growth rate suggests that earnings will drop to S$882.20M by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Singapore Airlines in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here. View our latest analysis for Singapore Airlines
How is Singapore Airlines going to perform in the near future?
Longer term expectations from the 13 analysts covering C6L’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of C6L’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.
From the current net income level of S$892.90M and the final forecast of S$988.03M by 2021, the annual rate of growth for C6L’s earnings is 2.09%. This leads to an EPS of SGD0.86 in the final year of projections relative to the current EPS of SGD0.76. The main reason for growth is a result of a high top-line growth of 4.90% falling down into the bottom line. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 5.65% to 5.36% by the end of 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Singapore Airlines, I’ve put together three key 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.
Future Earnings: How does Singapore Airlines’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Singapore Airlines? 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.
