Yahoo Finance Will Vedanta Resources plc’s (LON:VED) Earnings Grow Over The Next Year?
Based on Vedanta Resources plc’s (LSE:VED) earnings update in March 2018, analyst consensus outlook appear vastly optimistic, with earnings expected to grow by a high double-digit of 61.62% in the upcoming year, against the historical 5-year average growth rate of -27.84%. Currently with earnings of US$235.60M, we can expect this to reach US$380.77M by 2019. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here. Check out our latest analysis for Vedanta Resources
Can we expect Vedanta Resources to keep growing?
The longer term expectations from the 6 analysts of VED is tilted towards the 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 VED’s earnings growth over these next few years.
By 2021, VED’s earnings should reach US$620.77M, from current levels of US$235.60M, resulting in an annual growth rate of 42.68%. This leads to an EPS of $2.2 in the final year of projections relative to the current EPS of $0.85. Earnings growth appears to be a result of reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 1.53%, which is expected to expand to 3.24% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Vedanta Resources, I’ve compiled three relevant 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 Vedanta Resources 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 Vedanta Resources is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Vedanta Resources? 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 pass 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.
