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Chow Tai Fook Jewellery Group Limited's (HKG:1929) most recent earnings update in June 2019 showed that the business experienced a robust tailwind, eventuating to a double-digit earnings growth of 12%. Below, I've laid out key numbers on how market analysts view Chow Tai Fook Jewellery Group's earnings growth outlook 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 Chow Tai Fook Jewellery Group
Market analysts' prospects for the upcoming year seems optimistic, with earnings expanding by a robust 14%. This growth seems to continue into the following year with rates arriving at double digit 26% compared to today’s earnings, and finally hitting HK$6.5b by 2022.
While it’s useful to understand the growth each year relative to today’s level, it may be more beneficial to estimate the rate at which the business is rising or falling on average every year. The advantage of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Chow Tai Fook Jewellery Group's earnings trajectory over time, which may be more relevant for long term investors. To calculate 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 11%. This means that, we can assume Chow Tai Fook Jewellery Group will grow its earnings by 11% every year for the next couple of years.
Next Steps:
For Chow Tai Fook Jewellery Group, I've compiled three relevant factors you should further examine:
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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 1929 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 1929 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 1929? 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. Thank you for reading.