Graco Inc.'s (NYSE:GGG) announced its latest earnings update in December 2018, which showed that the company experienced a robust tailwind, leading to a double-digit earnings growth of 35%. Below, I've presented key growth figures on how market analysts view Graco's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Graco

Analysts' outlook for the coming year seems rather subdued, with earnings increasing by a single digit 0.3%. The following year doesn't look much more exciting, though earnings does reach US$393m in 2022.

Although it is useful to understand the rate of growth each year relative to today’s figure, it may be more insightful analyzing the rate at which the company is moving on average every year. The advantage of this approach is that we can get a bigger picture of the direction of Graco's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 3.9%. This means that, we can assume Graco will grow its earnings by 3.9% every year for the next few years.

Next Steps:

For Graco, I've put together three relevant aspects 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 GGG 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 GGG is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GGG? 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.