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After BAIC Motor Corporation Limited's (HKG:1958) earnings announcement in December 2018, analysts seem fairly confident, with earnings expected to grow by 19% in the upcoming year against the past 5-year average growth rate of 2.4%. Presently, with latest-twelve-month earnings at CN¥4.3b, we should see this growing to CN¥5.1b by 2020. Below is a brief commentary around BAIC Motor's earnings outlook going forward, which may give you a sense of market sentiment for the company. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for BAIC Motor
How will BAIC Motor perform in the near future?
The longer term expectations from the 21 analysts of 1958 is tilted towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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 1958's earnings growth over these next few years.
By 2022, 1958's earnings should reach CN¥6.3b, from current levels of CN¥4.3b, resulting in an annual growth rate of 12%. EPS reaches CN¥0.81 in the final year of forecast compared to the current CN¥0.55 EPS today. In 2022, 1958's profit margin will have expanded from 2.8% to 3.2%.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For BAIC Motor, there are three important factors you should further research:
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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 BAIC Motor 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 BAIC Motor 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 BAIC Motor? 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.