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OUE Commercial Real Estate Investment Trust’s (SGX:TS0U) released its most recent earnings update in December 2017, which revealed that the company benefited from a substantial tailwind, more than doubling its earnings from the prior year. Below is a brief commentary on my key takeaways on how market analysts perceive OUE Commercial Real Estate Investment Trust’s earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. See our latest analysis for OUE Commercial Real Estate Investment Trust
Analysts’ outlook for the upcoming year seems pessimistic, with earnings declining by a double-digit -64.59%. In the next couple of years, earnings are predicted to continue to be below today’s level, with a decline of -59.82% in 2020, eventually reaching S$52.64M in 2021.
Even though it’s useful to understand the growth each year relative to today’s figure, it may be more insightful to estimate the rate at which the company is moving every year, on average. The pro of this approach is that we can get a bigger picture of the direction of OUE Commercial Real Estate Investment Trust’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is -22.12%. This means, we can assume OUE Commercial Real Estate Investment Trust will chip away at a rate of -22.12% every year for the next few years.
Next Steps:
For OUE Commercial Real Estate Investment Trust, I’ve put together three important aspects you should look at:
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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.
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Valuation: What is TS0U 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 TS0U is currently mispriced by the market.
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Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TS0U? 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.