CRH plc (ISE:CRG): Are Analysts Bullish?

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CRH plc's (ISE:CRG) released its most recent earnings update in March 2019, which suggested that the company endured a major headwind with earnings declining by -20%. Below, I've laid out key growth figures on how market analysts view CRH's earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

View our latest analysis for CRH

Market analysts' consensus outlook for the coming year seems positive, with earnings growing by a robust 22%. This growth seems to continue into the following year with rates arriving at double digit 34% compared to today’s earnings, and finally hitting €2.1b by 2022.

ISE:CRG Past and Future Earnings, July 12th 2019

Although it’s informative understanding the rate of growth each year relative to today’s value, it may be more insightful analyzing the rate at which the company is rising or falling on average every year. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of CRH's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 12%. This means, we can anticipate CRH will grow its earnings by 12% every year for the next few years.

Next Steps:

For CRH, I've compiled three relevant factors you should look at:

  1. 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.
  2. Valuation: What is CRG 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 CRG is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CRG? 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.