Looking at Sun Life Financial Inc.'s (TSE:SLF) earnings update in December 2018, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 14% next year relative to the past 5-year average growth rate of 7.5%. Currently with trailing-twelve-month earnings of CA$2.5b, we can expect this to reach CA$2.9b by 2020. Below is a brief commentary on the longer term outlook the market has for Sun Life Financial. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
How will Sun Life Financial perform in the near future?
The view from 11 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. 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 SLF's earnings growth over these next few years.
By 2022, SLF's earnings should reach CA$3.3b, from current levels of CA$2.5b, resulting in an annual growth rate of 9.1%. This leads to an EPS of CA$5.67 in the final year of projections relative to the current EPS of CA$4.16. In 2022, SLF's profit margin will have expanded from 9.3% to 11%.
Future outlook is only one aspect when you're building an investment case for a stock. For Sun Life Financial, there are three relevant 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 Sun Life Financial 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 Sun Life Financial is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Sun Life Financial? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.