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Looking at Odfjell Drilling Ltd.'s (OB:ODL) earnings update in March 2019, the consensus outlook from analysts appear bearish, with profits predicted to drop by 17% next year against the past 5-year average growth rate of 11%. Currently with a trailing-twelve-month profit of US$23m, the consensus growth rate suggests that earnings will drop to US$19m by 2020. Below is a brief commentary on the longer term outlook the market has for Odfjell Drilling. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
View our latest analysis for Odfjell Drilling
Can we expect Odfjell Drilling to keep growing?
Over the next three years, it seems the consensus view of the 7 analysts covering ODL is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for ODL, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$23m and the final forecast of US$61m by 2022, the annual rate of growth for ODL’s earnings is 44%. This leads to an EPS of $0.42 in the final year of projections relative to the current EPS of $0.10. Margins are currently sitting at 3.3%, which is expected to expand to 7.4% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Odfjell Drilling, I've put together three key aspects 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 Odfjell Drilling 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 Odfjell Drilling 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 Odfjell Drilling? 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.