What Do Analysts Think About Sun Life Financial Inc.’s (TSE:SLF) Earnings Outlook?

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Sun Life Financial Inc.’s (TSE:SLF) latest earnings update in December 2018 showed that the business experienced a robust tailwind, leading to a double-digit earnings growth of 17%. Below, I’ve presented key growth figures on how market analysts perceive Sun Life Financial’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

See our latest analysis for Sun Life Financial

Market analysts’ consensus outlook for this coming year seems buoyant, with earnings expanding by a robust 12%. This growth seems to continue into the following year with rates reaching double digit 24% compared to today’s earnings, and finally hitting CA$3.2b by 2022.

TSX:SLF Future Profit February 18th 19

Even though it is useful to be aware of the growth each year relative to today’s level, it may be more beneficial gauging the rate at which the business is rising or falling on average every year. The pro of this technique is that we can get a better picture of the direction of Sun Life Financial’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve appended 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 9.7%. This means, we can assume Sun Life Financial will grow its earnings by 9.7% every year for the next couple of years.

Next Steps:

For Sun Life Financial, I’ve put together three pertinent factors you should further research:

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 SLF 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 SLF is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SLF? 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 editorial-team@simplywallst.com. 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. On rare occasion, data errors may occur. Thank you for reading.