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Based on Air Products and Chemicals, Inc.'s ( NYSE:APD ) earnings update in March 2019, analyst consensus outlook appear cautiously optimistic, as a 17% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 8.5%. Presently, with latest-twelve-month earnings at US$1.5b, we should see this growing to US$1.7b by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Investors wanting to learn more about other aspects of the company should research its fundamentals here .
How is Air Products and Chemicals going to perform in the near future?
The longer term view from the 19 analysts covering APD 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 understand the overall trajectory of APD's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, APD's earnings should reach US$2.2b, from current levels of US$1.5b, resulting in an annual growth rate of 13%. EPS reaches $11.2 in the final year of forecast compared to the current $6.64 EPS today. Margins are currently sitting at 16%, which is expected to expand to 19% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Air Products and Chemicals, there are three relevant factors 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.
- Valuation : What is Air Products and Chemicals 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 Air Products and Chemicals is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Air Products and Chemicals? 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. Thank you for reading.