In This Article:
In June 2018, Unitil Corporation (NYSE:UTL) released its earnings update. Generally, it seems that analyst expectations are fairly bearish, as a 0.2% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 7.4%. By 2019, we can expect Unitil’s bottom line to reach US$32.7m, a jump from the current trailing-twelve-month US$32.7m. Below is a brief commentary on the longer term outlook the market has for Unitil. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
Check out our latest analysis for Unitil
How will Unitil perform in the near future?
The longer term view from the 3 analysts covering UTL is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$29.0m and the final forecast of US$32.2m by 2021, the annual rate of growth for UTL’s earnings is 4.1%. This leads to an EPS of $2.43 in the final year of projections relative to the current EPS of $2.06. Earnings growth appears to be a result of cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. With a current profit margin of 7.1%, this movement will result in a margin of 7.3% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Unitil, I’ve compiled three pertinent factors 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.
-
Future Earnings: How does Unitil’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
-
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Unitil? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.