Will Watts Water Technologies, Inc.'s (NYSE:WTS) Earnings Grow In The Next 12 Months?
Based on Watts Water Technologies, Inc.'s (NYSE:WTS) earnings update in December 2018, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 9.0% next year compared with the higher past 5-year average growth rate of 18%. By 2020, we can expect Watts Water Technologies’s bottom line to reach US$140m, a jump from the current trailing-twelve-month of US$128m. Below is a brief commentary on the longer term outlook the market has for Watts Water Technologies. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
Check out our latest analysis for Watts Water Technologies
How is Watts Water Technologies going to perform in the near future?
Over the next three years, it seems the consensus view of the 9 analysts covering WTS is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for WTS, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of 7.6% based on the most recent earnings level of US$128m to the final forecast of US$162m by 2022. EPS reaches $4.73 in the final year of forecast compared to the current $3.73 EPS today. With a current profit margin of 8.2%, this movement will result in a margin of 9.6% by 2022.
Next Steps:
Future outlook is only one aspect when you're building an investment case for a stock. For Watts Water Technologies, I've put together three key 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 Watts Water Technologies 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 Watts Water Technologies is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Watts Water Technologies? 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.
