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Based on Kingspan Group plc’s (ISE:KRX) earnings update in June 2018, analyst forecasts seem fairly subdued, with earnings expected to grow by 19% in the upcoming year compared with the higher past 5-year average growth rate of 28%. Currently with trailing-twelve-month earnings of €284m, we can expect this to reach €337m by 2020. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Kingspan Group in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Check out our latest analysis for Kingspan Group
What can we expect from Kingspan Group in the longer term?
The 8 analysts covering KRX view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
This results in an annual growth rate of 9.4% based on the most recent earnings level of €284m to the final forecast of €404m by 2022. This leads to an EPS of €2.35 in the final year of projections relative to the current EPS of €1.59. Margins are currently sitting at 7.8%, which is expected to expand to 8.8% by 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Kingspan Group, there are three essential aspects you should further research:
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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.
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Valuation: What is Kingspan Group 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 Kingspan Group is currently mispriced by the market.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kingspan Group? 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. On rare occasion, data errors may occur. Thank you for reading.