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As AerCap Holdings N.V. ( NYSE:AER ) released its latest earnings announcement on 31 December 2018, analyst forecasts seem pessimistic, with profits predicted to drop by -6.7% next year relative to the past 5-year average growth rate of 13%. With trailing-twelve-month net income at current levels of US$1.0b, the consensus growth rate suggests that earnings will decline to US$947m by 2020. Below is a brief commentary on the longer term outlook the market has for AerCap Holdings. Readers that are interested in understanding the company beyond these figures should research its fundamentals here .
Can we expect AerCap Holdings to keep growing?
The view from 6 analysts over the next three years 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. 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 AER’s earnings growth over these next few years.
From the current net income level of US$1.0b and the final forecast of US$1.1b by 2022, the annual rate of growth for AER’s earnings is 0.8%. This leads to an EPS of $8.78 in the final year of projections relative to the current EPS of $7. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 21% to 20% by the end of 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For AerCap Holdings, I’ve put together three important aspects you should further research:
- 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 AerCap Holdings’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 AerCap Holdings? 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 email@example.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. On rare occasion, data errors may occur. Thank you for reading.