Will Ibstock plc's (LON:IBST) Earnings Grow Over The Next Year?
As Ibstock plc (LON:IBST) released its earnings announcement on 31 December 2018, the consensus outlook from analysts appear somewhat bearish, as a 1.4% rise in profits is expected in the upcoming year, relative to the higher past 5-year average growth rate of 13%. Presently, with latest-twelve-month earnings at UK£76m, we should see this growing to UK£77m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Ibstock
How will Ibstock perform in the near future?
The view from 9 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. To understand the overall trajectory of IBST'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.
From the current net income level of UK£76m and the final forecast of UK£86m by 2022, the annual rate of growth for IBST’s earnings is 3.3%. This leads to an EPS of £0.21 in the final year of projections relative to the current EPS of £0.19. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 20% to 19% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Ibstock, I've put together three fundamental 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 Ibstock 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 Ibstock is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ibstock? 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.
