Yahoo Finance Will TransCanada Corporation’s (TSE:TRP) Earnings Grow Over The Next Year?
In June 2018, TransCanada Corporation (TSE:TRP) released its earnings update. Generally, analysts seem fairly confident, with earnings expected to grow by 8.9% in the upcoming year against the past 5-year average growth rate of -2.8%. By 2019, we can expect TransCanada’s bottom line to reach CA$3.26b, a jump from the current trailing-twelve-month CA$2.99b. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for TransCanada in the longer term. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for TransCanada
Exciting times ahead?
Longer term expectations from the 11 analysts covering TRP’s stock is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of TRP’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.
By 2021, TRP’s earnings should reach CA$3.96b, from current levels of CA$3.00b, resulting in an annual growth rate of 9.5%. EPS reaches CA$4.24 in the final year of forecast compared to the current CA$3.44 EPS today. The bottom-line growth seems to be caused by cost cutting activities, as revenues is expected to grow much slower than earnings. With a current profit margin of 22.3%, this movement will result in a margin of 26.3% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For TransCanada, I’ve put together three essential factors 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 TransCanada 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 TransCanada is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of TransCanada? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
