Based on Cracker Barrel Old Country Store, Inc.'s (NASDAQ:CBRL) earnings update in May 2019, analyst forecasts seem fairly subdued, as a 0.6% rise in profits is expected in the upcoming year, compared with the higher past 5-year average growth rate of 12%. Currently with trailing-twelve-month earnings of US$248m, we can expect this to reach US$249m by 2020. Below is a brief commentary around Cracker Barrel Old Country Store's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Exciting times ahead?
The view from 8 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. 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 CBRL's earnings growth over these next few years.
This results in an annual growth rate of 2.3% based on the most recent earnings level of US$248m to the final forecast of US$254m by 2022. However, if we exclude extraordinary items from net income, we see that earnings is projected to fall over time, resulting in an EPS of $9.39 in the final year of forecast compared to the current $10.31 EPS today. As revenues is expected to outpace earnings, analysts expect margins to contract from the current 8.2% to 7.8% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Cracker Barrel Old Country Store, I've put together three key factors you should look at:
- 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 Cracker Barrel Old Country Store 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 Cracker Barrel Old Country Store is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Cracker Barrel Old Country Store? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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