What Should We Expect From S&P Global Inc’s (NYSE:SPGI) Earnings Over The Next Year?
In December 2017, S&P Global Inc (NYSE:SPGI) announced its latest earnings update. Overall, analysts seem fairly confident, with profits predicted to increase by 38.84% next year relative to the past 5-year average growth rate of 17.59%. With net income at current levels of $1,496.0M, we should see this rise to $2,077.1M in 2019. Below is a brief commentary on the longer term outlook the market has for S&P Global. Readers that are interested in understanding the company beyond these figures should research its fundamentals here. Check out our latest analysis for S&P Global
Can we expect S&P Global to keep growing?
The view from 15 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. 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.
This results in an annual growth rate of 11.76% based on the most recent earnings level of $1,496.0M to the final forecast of $2,464.6M by 2021. EPS reaches $10.22 in the final year of forecast compared to the current $5.84 EPS today. The bottom-line growth seems to be caused by cost cutting activities, as revenues is expected to grow much slower than earnings. Margins is currently sitting at 24.67%, which is expected to expand to 33.92% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For S&P Global, there are three relevant aspects 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 S&P Global 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 S&P Global is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of S&P Global? 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.
