How Do Analysts See Gibson Energy Inc. (TSE:GEI) Performing Over The Next Year?
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Since Gibson Energy Inc. (TSE:GEI) released its earnings in December 2018, analysts seem highly optimistic, as a 52% rise in profits is expected in the upcoming year, relative to the past 5-year average growth rate of -27%. By 2020, we can expect Gibson Energy’s bottom line to reach CA$123m, a jump from the current trailing-twelve-month of CA$81m. In this article, I've outline a few earnings growth rates to give you a sense of the market sentiment for Gibson Energy in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
View our latest analysis for Gibson Energy
What can we expect from Gibson Energy in the longer term?
Over the next three years, it seems the consensus view of the 8 analysts covering GEI is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of GEI's earnings growth over these next few years.
This results in an annual growth rate of 21% based on the most recent earnings level of CA$81m to the final forecast of CA$172m by 2022. This leads to an EPS of CA$1.38 in the final year of projections relative to the current EPS of CA$0.56. With a current profit margin of 1.2%, this movement will result in a margin of 2.4% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Gibson Energy, there are three important factors you should further examine:
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 Gibson Energy 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 Gibson Energy is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Gibson Energy? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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