Yahoo Finance What Should We Expect From Canadian Tire Corporation, Limited's (TSE:CTC.A) Earnings Over The Next Year?
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Since Canadian Tire Corporation, Limited (TSE:CTC.A) released its earnings in December 2018, analysts seem cautiously optimistic, as a 18% increase in profits is expected in the upcoming year, against the past 5-year average growth rate of 5.1%. Presently, with latest-twelve-month earnings at CA$692m, we should see this growing to CA$817m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
See our latest analysis for Canadian Tire
Can we expect Canadian Tire to keep growing?
The 11 analysts covering CTC.A view its longer term outlook with a 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 CTC.A'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 CA$692m and the final forecast of CA$891m by 2022, the annual rate of growth for CTC.A’s earnings is 8.2%. This leads to an EPS of CA$15.83 in the final year of projections relative to the current EPS of CA$10.67. In 2022, CTC.A's profit margin will have expanded from 5.3% to 5.7%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Canadian Tire, I've put together three key aspects 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.
Valuation: What is Canadian Tire 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 Canadian Tire is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Canadian Tire? 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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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. Thank you for reading.
